Saturday, 23 August 2014
Last updated 13 hours ago
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.
Aug 4 2014 | 7:42am ET
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The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note