April 19 (Bloomberg) -- Simon Property Group Inc.’s bid to invest in General Growth Properties Inc. would give the largest U.S. mall owner too much control over its biggest competitor, said fund manager Bruce Berkowitz, who’s backing a rival plan.
Simon Chief Executive Officer David Simon, spurned in his takeover attempt of General Growth, last week offered to invest $2.5 billion in a reorganization of the bankrupt company and match the terms of a plan by Brookfield Asset Management Inc., Pershing Square Capital Management LP and Berkowitz’s Fairholme Capital Management LLC, the biggest debt holder. Berkowitz said he won’t participate in Simon’s new proposal.
“It is crazy,” Berkowitz said in an April 16 interview at Fairholme’s Miami headquarters. “David is going to take a piece and he is going to be quiet? He is going to be a nonparticipating, passive shareholder? How will the big chains feel if they feel someone has their hand in both pieces? What is the competitive aspect of that?”
General Growth has interests in or manages more than 200 regional shopping malls in 43 U.S. states. Simon owns or has stakes in 381 properties in North America, Europe and Asia. It offered $10 billion to purchase its rival in February, a bid that General Growth dismissed as too low.
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Simon Chief Executive Officer David Simon, spurned in his takeover attempt of General Growth, last week offered to invest $2.5 billion in a reorganization of the bankrupt company and match the terms of a plan by Brookfield Asset Management Inc., Pershing Square Capital Management LP and Berkowitz’s Fairholme Capital Management LLC, the biggest debt holder. Berkowitz said he won’t participate in Simon’s new proposal.
“It is crazy,” Berkowitz said in an April 16 interview at Fairholme’s Miami headquarters. “David is going to take a piece and he is going to be quiet? He is going to be a nonparticipating, passive shareholder? How will the big chains feel if they feel someone has their hand in both pieces? What is the competitive aspect of that?”
General Growth has interests in or manages more than 200 regional shopping malls in 43 U.S. states. Simon owns or has stakes in 381 properties in North America, Europe and Asia. It offered $10 billion to purchase its rival in February, a bid that General Growth dismissed as too low.
Read the full story at businessweek.com
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