Pershing Square, Brookfield Strike Deal Over Mall Co.

Jan 3 2013 | 11:18am ET

Pershing Square Capital Management is ending its fight over mall owner General Growth Properties.

The New York-based activist hedge fund has agreed to go passive, part of deal that saw it sell warrants to buy more than 18 million GGP shares to Brookfield Asset Management, GGP's largest shareholder and Pershing Square's one-time ally turned rival. Brookfield paid about $271.9 million for the warrants, which grant the right to buy GGP shares at less than half their current value.

Pershing Square also agreed to keep its stake below 10% for at least four years, and rescinded its call for GGP to explore a sale. In return, Brookfield, which led a reorganization of GGP with Pershing Square's backing in 2010, has agreed to ownership limits; in addition to seeking a sale, Pershing Square had warned against Brookfield's taking "de facto" control over GGP.

Brookfield owns more than 40% of GGP's shares, but has agreed to a 45% cap and to limit its right to vote shares in excess of 38.2% of GGP's common stock.

Pershing Square, GGP's second-largest shareholder, owns about 8% of the company's shares. The hedge fund said it was satisfied with GGP's board.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...