Ackman fuels General Growth with Simon Property M&A carrot
A similar dynamic to SiriusXM is playing out in Bill Ackman's balance sheet and real estate recovery bet on General Growth, and a newly launched proposal for shareholders to push for the company's sale to Simon Property. The goal is to sell the mall operator to Simon Property, netting shareholders a premium to what 40%-plus shareholder Brookfield Asset Management would pay for a majority stake.
In August, 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, 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 company's second-largest shareholder.
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; however, General Growth shares are far below the $28 share price that Ackman calculates might be reached in a merger.Simon Property's prospective 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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