Pershing Square Capital Management has buried the hatchet with mall owner Simon Property Group, which it bested in a bitter battle over the future of Canadian mall company General Growth Properties.
The New York-based activist hedge fund in 2010 helped push through a reorganization of General Growth with Brookfield Asset Management, leading Simon to complain about Pershing Square's "obvious conflict of interest." Simon had sought to buy the company at the time.
Now, however, Pershing Square chief William Ackman and Simon CEO David Simon have met about the latter making another approach. Pershing Square urged General Growth, which it has a 10.2% stake in, to put it up for sale last week, noting that if Simon made a similar offer, it would amount to a 51% premium on General Growth's current share price.
General Growth said only that it "will carefully review" Pershing Square's letter.
According to Reuters, Ackman approached Simon about making a deal nearly a year ago, but it went nowhere, because Brookfield, which owns 42.2% of General Growth, wouldn't approve it. Ackman also urged General Growth to prevent Brookfield from taking "de facto" control; the company has been steadily building its stake in General Growth.
"Once Brookfield indicated that it was interested in acquiring the company, its interests diverged with those of the other GGP shareholders," Ackman wrote. "We, other shareholders, and the board must therefore take a more vigilant and proactive role in protecting ourselves."
General Growth is one of Pershing Square's largest investments and has already earned the firm more than $1 billion in profits, a 77-fold return.