Pershing Square Poised For Big Payday On Malls Bet

Mar 1 2010 | 3:35am ET

In the matter of mall owner General Growth Properties, it seems that Pershing Square Capital Management can’t lose.

The New York-based activist hedge fund shop helmed by William Ackman owns a 6.4% stake in the bankrupt company, having paid an average of 46 cents for each of its 20.1 million shares. Pershing Square is backing a proposal that would split the U.S.’s second-largest mall owner in two that values each existing General Growth share at $15, with would be a $292 million profit for the hedge fund.

A competing offer from Simon Property Group, the largest mall operator in the country, would earn Pershing Square a $170 million profit. Simon, of course, could make a richer offer.

And another potential bidder, Australia’s Westfield Group, has signed a non-disclosure agreement with General Growth as it mulls an offer, Bloomberg News reports.

Simon has dismissed the new plan—backed by a $2.63 billion investment from Brookfield Asset Management—as “a risky equity play.” Under the proposal, General Growth shareholders would get a new General Growth share, initially valued at $10 apiece, and a share of General Growth Opportunities, valued at $5 each.


In Depth

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note