NEW YORK ( TheStreet) -- After taking on consumer goods giant Procter & Gamble (PG) and taking Burger King (BK) public earlier in the year, Bill Ackman, the head of activist hedge fund Pershing Square Capital Management, has unveiled his most ambitious deal of 2012: a proposed takeover of mall operator General Growth Properties (GGP).
On Thursday, Ackman said in a letter to General Growth's board that the company should cement its impressive emergence from bankruptcy by selling itself to Simon Property Group (SPG) in a deal that could be worth in excess of $26 billion. Ackman owns more than 10% of General Growth's shares, making his fund the real estate company's second-largest shareholder.
Ackman's move caused General Growth shares to surge nearly 10% in afternoon trading to a new post-bankruptcy high above $20. Still, General Growth shares are far below the $28 share price that Ackman calculates might be reached in a merger, signaling that significant doubts remain about a Simon Property takeover.
A potential deal comes amid a real estate sector M&A drama that's been thickening since General Growth's 2009 bankruptcy and its 2010 re-emergence.A prospective Simon Property acquisition of General Growth would thwart a takeover by real estate giant Brookfield Asset Management (BAM) -- General Growth's top shareholder -- which Ackman argues would come without a control premium, in the letter filed with the Securities and Exchange Commission. The drama marks what could be a turning point in General Growth's emergence from bankruptcy and an impressive 50% stock surge in the past year, on optimism about a widespread real estate recovery. In the
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