Activist investor William Ackman has sold some of his holdings in mall owner General Growth Properties Inc. (GGP: Quote) as part of a deal to drop calls for the company to explore a sale of itself.
In a regulatory filing on Thursday, Ackman's hedge fund Pershing Square Capital Management LP said it sold GGP warrants to Brookfield Asset Management Inc. (BAM: Quote, BAM_A.TO), GGP's largest shareholder, for $271.88 million.
Pershing Square, GGP's second-largest shareholder, also agreed to limit its stake in the company to no more than 9.9 percent for the next four years and be a "passive" shareholder. Meanwhile, Brookfield agreed to limits on its ownership of GGP at 40 percent.
In August, Pershing Square urged GGP's board of directors to consider a sale of the company in order to maximize shareholder value. Pershing Square noted that GGP's larger rival Simon Property Group Inc. (SPG: Quote) and Brookfield had both expressed interest in a takeover of the company.
Simon Property is the biggest owner of shopping malls in the U.S., while GGP is the second-largest U.S. mall owner. Brookfield is a Canadian alternative asset manager.
At that time, Pershing Square said it had discussed a takeover of GGP with Simon Property, but Brookfield did not support the deal and instead indicated it would seek to acquire GGP on its own. Further, Pershing Square noted that Brookfield's high degree of ownership and board representation in GGP gave it "enormous influence" over the company.
"This is particularly true in light of the fact that Simon, currently the most likely buyer of the company, is not being provided access to inside information, and has been effectively handcuffed and gagged from considering or proposing a transaction for which it needs no financing," Pershing Square had said.
GGP filed for bankruptcy in 2009 after it was unable to finance a huge debt load of $27 billion in the wake of the financial crisis. The company exited bankruptcy protection in November 2010.
GGP closed Thursday's trading at $19.46, down $0.59 or 2.94 percent on a volume of 20.04 million shares.
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by RTT Staff Writer
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