Ackman Urges General Growth to Start Talks with Simon Property

Monday, 27 Aug 2012 02:18 PM

 

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Bill Ackman said his Pershing Square Capital Management LP hedge fund isn’t looking to sell its stake in General Growth Properties Inc. and urged the mall owner to enter negotiations for a takeover by Simon Property Group Inc.

General Growth should “immediately form a special committee” and “initiate negotiations with Simon promptly,” Ackman said in a letter filed Monday with the U.S. Securities and Exchange Commission. Ackman, whose company is General Growth’s second-largest shareholder, first said on Aug. 23 that Simon was interested in buying the Chicago-based company.

“We believe the Simon transaction is in the best interest of GGP shareholders and will have a positive impact on substantially all other stakeholders,” Ackman said in Monday’s letter to General Growth’s board.

General Growth, the No. 2 U.S. shopping-mall owner, exited bankruptcy protection in November 2010 following a takeover battle between Indianapolis-based Simon, its larger competitor, and an investor group that included Pershing Square and Brookfield Asset Management Inc. General Growth filed for bankruptcy in 2009 after weighing itself down with $27 billion in debt that it was unable to refinance because of the financial crisis and collapse of the commercial mortgage-backed securities market.

David Keating, a spokesman for General Growth, declined to comment on Ackman’s letter.

Messages left for Andrew Willis, a spokesman for Toronto- based Brookfield, General Growth’s largest investor, and Les Morris, a Simon spokesman, weren’t immediately returned.

‘Create Liquidity’

Ackman said last week that Brookfield also was interested in taking over the mall owner. Following Ackman’s disclosure, Brookfield said in a statement that it “is not taking any steps” to buy General Growth and that Pershing Square was trying to “create liquidity for its interest” in the company.

“At no time has Pershing Square sought liquidity for its GGP stake in conversations with Brookfield, Simon or otherwise,” Ackman wrote in today’s letter. Pershing Square would be able to sell its General Growth stake within 90 days “with minimal if any market impact” if it wanted to, he said.

General Growth rose 2.1 percent to $20.18 at 1:48 p.m. in New York trading.

© Copyright 2014 Bloomberg News. All rights reserved.

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