NEW YORK ( TheStreet) -- Hedge fund manager Bill Ackman wants mall operator General Growth Properties ( GGP) to sell itself to Simon Property Group ( SPG) in a prospective $20 billion-plus deal that could be one of the largest U.S. acquisitions since the financial crisis. That's not news -- Ackman unveiled the plans in an August letter -- but the hedge fund manager seems to be prioritizing the proposed deal over other "shakeup" bets he has made in recent history. Speaking at the Value Investing Congress on Monday, Ackman who runs Pershing Square Capital Management, led a keynote presentation by detailing his General Growth M&A efforts, while putting J.C. Penney ( JCP) and Procter & Gamble ( PG) on the bully pulpit backburner. Ackman's fund has put big money behind restructuring efforts at J.C. Penney and calls for management change at consumer products giant Procter & Gamble, amid a heavy slate of 2012 investments. But the clock may be ticking on General Growth much faster, with a rival for the real estate company buying up shares in what Ackman says is an effort to thwart any takeover alternative. Ackman's presentation on General Growth reiterated his goal to sell the mall operator to Simon Property, netting shareholders a premium to what 40%-plus shareholder Brookfield Asset Management ( BAM) would pay for a majority stake. Ackman owns more than 10% of General Growth's shares, making his fund the company's second-largest shareholder. "It is only a matter of time before Brookfield de facto controls the company," warned Pershing in a letter sent to General Growth during the summer. "
If control of the company is ceded to Brookfield, shareholders will suffer enormous and irreparable harm for they will lose the ability to capture an appropriate control premium for their shares," he added. In November, Brookfield proposed it buy General Growth and sell off unwanted assets to Simon Property to finance a deal. In April, Pershing says Simon Property rejected the idea of buying assets piecemeal and Brookfield began buying up General Growth shares as investors like Blackstone and Fairholme Funds exited large stakes, according to Ackman's letter. Brookfield has gone from owning 29% of the company at emergence from bankruptcy to 42.2% today. Where does this time-sensitive focus leave Ackman's prod of management at J.C. Penney and Procter & Gamble? There is still work to be done, even if they weren't top of mind at this year's Value Investing Conference.
The sometimes-activist investor took a 1% stake in Dow industrials giant Procter & Gamble and called for the ouster of chief executive Bob McDonald during the summer. While the activist effort has yet to cause a shakeup in the C-suite, Ackman's investment has been the catalyst for a 10%-plus rise in the company's stock as it breaches 52-week highs near $70. Instead of supporting management change, P&G committed to restructuring plans that cut $10 billion in costs by 2016 and 4,100 layoffs by June 2013. J.C. Penney, Pershing Square's largest investment, has not fared as well, off over 30% year-to-date as the retailer and its new chief executive Ron Johnson struggle to implement new pricing strategies. Ackman addressed J.C. Penney and P&G only when asked about the investments during a Q&A session after his presentation. Ackman's real estate sector M&A drama has been brewing since General Growth's 2009 bankruptcy and its 2010 re-emergence. General Growth shares are far below the $28 share price that Ackman calculated some time ago might be reached in a merger. On Monday, Ackman instead quoted sell side research, saying Citigroup analysts argue Simon could pay as much as $24 per share for General Growth, whose shares closed at $19.41 on Monday. As Ackman pushes the deal, he also says he is willing to sell his stake to Brookfield at over $19 if Simon is blocked from an acquisition by management. According to the August letter, Ackman structured a takeover of General Growth with David Simon of Simon Property in 2011, worth nearly $20 billion. In the deal, General Growth shareholders would receive 0.1765 of a share of Simon stock -- at the time trading at $115 and valuing the company at $21, a 65% premium. Were that exchange offer to remain in a Simon Property merger at present share prices, Ackman calculates that General Growth could be valued at roughly $26 billion. In the recent
letter, Pershing asked that General Growth hire financial advisers to cement a previously discussed merger with Simon Property, as Brookfield tries to take control of the company through ordinary stock purchases and warrant contracts. The drama marks what could be a turning point in General Growth's emergence from bankruptcy and an impressive 50%-plus stock surge in the past year on optimism about a widespread real estate recovery. Pershing and Brookfield were instrumental in pulling General Growth out of bankruptcy -- recapitalizing the company by raising $2.6 billion from the Fairholme Funds and $500 million from private equity giant Blackstone Group ( BX). Some of Ackman's previous Value Investing Conference focus stocks have fared well: he unveiled the calculations behind his proposed breakup of Fortune Brands Home Security ( FBHS) last year, and it has been a top performer in the past 12 months, gaining over 100%. In June, Ackman was one of the cornerstone investors in the initial public offering of Burger King Holdings ( BKC), after Pershing Square took a 10% stake in the fast food chain by way of a special purpose vehicle, Justice Holdings, which he spoke about at last year's Value Investing Congress. Since its IPO, Burger King's stock is up roughly 50% to over $23, as of Monday's close. -- Written by Antoine Gara in New York