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Ackman, Fairholme Offer to Inject Capital into GGP


The General Growth reorganization continues to be a moving target. The latest twist is that Fairholme Capital Management and Pershing Square Capital Management are offering to invest $3.93 billion in the firm in backing the plan conceived by General Growth and Brookfield Asset Management.

Here's General Growth's press release.

Todd Sullivan has posted the term sheet.

And here's an Associated Press write-up of what's on offer.

Two major investors in General Growth Properties Inc. are joining Brookfield Asset Management in offering to inject a combined $6.5 billion in fresh funds into the shopping mall operator to help it emerge from bankruptcy protection.

General Growth said in a statement late Monday that its board is weighing an offer from Fairholme Capital Management, one of its largest unsecured creditors, and Pershing Square Capital Management, one of its largest shareholders, to invest $3.93 billion. It said the new equity capital investment is valued at $15 a share.

The offer would be teamed up with one from Canada's Brookfield Asset Management, which last month said it would invest $2.6 billion in cash in exchange for General Growth shares.

Chicago-based General Growth said the combined investments, along with it issuing $1.5 billion of debt, would give it the cash it needs to emerge from bankruptcy protection and pay unsecured creditors in full in cash.

General Growth also said William Ackman, who runs Pershing Square Capital Management, resigned from General Growth's board of directors in conjunction with the hedge fund's participation in the investment offer.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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