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Brookfield, Simon & GGP

September 12, 2012 | About:
Todd Sullivan

Todd Sullivan

22 followers
The people at BAM sure want me to see anything in the media that supports them. Anything it seems that comes out they want me to see, they are quick to send along to me with a note “just wanted to be sure you saw this”. Funny, they sure didn’t seem to care if I saw Ackman’s letter….

Here is what I was sent yesterday:

Bloomberg:

A Simon Property Group Inc. executive said that the largest U.S. mall owner isn’t trying to acquire competitor General Growth Properties Inc. (GGP), which announced yesterday that it won’t put itself up for sale.

“We have no interest in General Growth,” Stephen Sterrett, chief financial officer of Indianapolis-based Simon, said today at a conference hosted by Barclays Plc’s investment- banking unit that was broadcast over the Internet.

Sterrett’s comments were the first a Simon Property executive has made about General Growth since investor Bill Ackman urged the Chicago-based company on Aug. 23 to consider a sale. Ackman, founder of Pershing Square Capital Management LP, said at the time that Simon had shown interest in a plan to buy General Growth.

Ackman, in an Aug. 27 letter to General Growth’s board, said Pershing Square made a 37-page presentation to David Simon, Simon Property’s chairman and chief executive officer, about a proposed deal in which Simon would pay 0.1765 a share for each General Growth share. Based on Simon’s closing price today, General Growth would be valued at $27.84 a share.

General Growth fell 2.5 percent to $20.09 in New York trading today. The shares have gained 8.5 percent since Aug. 22, the day before Ackman first said publicly that the company should put itself up for sale. Simon Property rose 1 percent to $157.74 today.

‘Serious Interest’

David Simon “expressed serious interest” in pursuing the deal, according to Ackman’s Aug. 27 letter. General Growth exited bankruptcy protection in November 2010 following a takeover battle between Simon and an investor group that included Brookfield Asset Management Inc. (BAM/A) and Pershing Square, now General Growth’s two biggest shareholders. The mall owner filed for bankruptcy in 2009 after weighing itself down with $27 billion of debt.

“There’s been a fair bit of speculation and inquiry lately about General Growth and our rumored interest in that company, and I think it’s important to respond and set the record straight,” Sterrett said today. “We have not made an offer for General Growth or its properties since 2010, during GGP’s bankruptcy, nor have we subsequently agreed on any value for the company.”
This is what is called semantics…..plain and simple

Did SPG “officially” make an offer in writing? No, they would have publicized it if they did…

BUT….

1- If they had no interest in making one, why meet with Ackman and then why following that meeting with one with BAM’s Flatt? Was David Simon looking for restaurant recommendations?

2- Of course not, he wanted to buy GGP.

3- If was not serious about buying GGP, why would he sign a NDA?

5- That offer was in fact presented to Flatt

6- Flatt then made a counter offer that involved the breakup of GGP which SPG rejected

I find a few things interesting. No one involved here has come out and said “Ackman’s versions of events is erroneous”. Not a single person. What they have done is instead dance around the issues raised an attempt to alter the narrative (see post on Brookfield here). Notice the wording “nor have we subsequently agreed on any value for the company”. That doesn’t mean they did not make an informal offer to BAM. It doesn’t mean they were not negotiating and offer. It doesn’t mean they did not reject the offer BAM made to SPG to essentially break apart and share GGP. Just that was one was not officially made. Sound to me they are saying “it depends on what the definition of “is” is”

Semantics.

Anyone who has even casually followed this saga for the past near 3 years now knows David Simon desperately wants to own GGP. This is the second serious attempt in that time frame he has attempted to purchase it and we have lost track of the number of times he has spoken publicly and in print about the prior failed attempt to buy it. GGP is never off his radar. For anyone at SPG to even attempt to indicate otherwise is simply bullshit.

For the people at BAM to continually to email selective articles and letters from the involved companies representatives to me and then not answer the questions that arise from them, is bullshit. Saying “I’ll leave it up to you to interpret” is unacceptable.

Do you want to know how I interpret it? All the questions I am asking are VERY valid and you do not want to answer or are afraid to answer them. I interpret it to mean the events Ackman portrayed are in fact 100% accurate and you are hoping that I’ll just drop this as if an article in Bloomberg will suffice for my questions being answered. Never forget you reached out to me. I am not clogging your inbox with unsolicited questions and getting annoyed when you do not answer. You started this conversation with me. I can sign up in a dozen places to get news articles emailed to me. If you want to engage, fine, let’s do it but don’t think for a second this is a one way street. Your lack of or obtuse replies only serves to cement my opinion that there is more going on here……much more

If all my questions and comments are totally of the mark, say it, tell me why, I’m a reasonable guy. Saying nothing implies they are in fact right on the mark.

To be continued….

About the author:

Todd Sullivan
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 2.2/5 (9 votes)

Comments

vgm
Vgm - 1 year ago
"Do you want to know how I interpret it?"

No, really, no thanks.

Please leave your comment:


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