"Mr. Ackman's hedge fund, Pershing Square, is selling warrants that carry the right to buy more than 18.4-million shares of General Growth Properties Inc. to Brookfield for about $271.9-million. Mr. Ackman, a well-known activist investor, still owns nearly 8 per cent of General Growth Properties, but has agreed for the next four years to limits on its ownership level and ability to team up with others to push for change."
Previously, Ackman was pushing for a sale of General Growth to Simon Property Group. However, Ackman felt that Brookfield was stopping the deal.
“A Simon merger is substantially superior to General Growth remaining independent,” he said in the presentation, adding that “without the Brookfield guys in the room, this company should be sold.”
“Brookfield would like to prevent a Simon merger because if were to occur, Brookfield would not be able to form and spin off Brookfield Property Partners LP,” Ackman continued.
Both Pershing Square and Brookfield have agreed to cap their percentage stakes in General Growth. Ackman has agreed to not substantially increase his 8% stake, and Brookfield has agreed to cap its percentage ownership at 45%.
The stock was down 3.2% on the news of Ackman's settlement.