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General Growth Properties, Inc Message Board

  • magicformulaman magicformulaman Jan 11, 2011 7:53 AM Flag

    SPG try as they may

    cannot acquire more top end mall assets at a bargain. They missed that boat.

    This tells you the quality of this asset class.

    Simon is desperate to build their portfolio and they found out there is nothing being sold on the cheap.

    GGP is still undervalued imo.

    The assets are far superior to the current $15 price tag.

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    • you are absolutely correct.

      And with BAM finally getting a respectable foothold in the US retail real estate business they may very well be aggressive in maintaining that presence.

      It's a little too soon in the process and I am sure that the Honeymoon between BAM, Ack and Berkie is still strong;
      but sometime down the road the Hedgies will get board with this business and once they conclude they could put their capital to better use they will move fast.

    • Hawk,

      I've written previously about 3) (the third point you comment on)>> "They (BAM) may try and put their own team together and buy the Hedgies out at a price SPG would pay".

      With a large stake in GGP, the hedgies at some point need an exit strategy. There is nothing they would like better than a bidding war between BAM and Simon for GGP. I've written previously that I think a serious Simon bid would cause BAM to enter the bidding fray because they do want to maintin their position in GGP. They would have no choice but to dig deep and buck up and bid for GGP if they should want to keep it.

      Dabqs

    • Fly,

      "btw, i was considered sending you a case of ale but i am concerned about your cyborg liver."

      FYI, my liver is machine only--no need to be concerned--proceed with case of beer intentions.

      Dabqs ;-D

    • Fly:
      1. good point, SPG has been looking for bargains, but as he learns there are no bargains left and if he really wants to grow in the US Class A mall business, he is going to have to pay market price. I agree he is not there yet, but he is either going to have (1) get there, (2) accept little or no growth, (3) grow his company in some other segment.

      2. In my opinion, not an issue, the lawyers will deal with the anti-trust issues, even if it means selling some centers in markets like Boston and Vegas where SPG and GGP are the current dominant players.

      3. BAM has operating control and again in my opinion, they will not fight Berkie and Ack and the other Hedgies if they want to sell. They may try and put their own team together and buy the Hedgies out at a price SPG would pay, but in the end BAM is not going to operate GGP with a hostile or adversarial relationship with its major shareholders.

      4. You overestimate Simon. Neither the Company nor its CEO have any shame and could care less what anyone thinks of them. Their concern is protecting SPG and growing it in as cost effective way as possible. They know they are smart, they know they are respected, and they know that most in the business world don't like them. They don't care what people think about them.


      I don't think that anyone is predicting that this is going to happen soon. The critical points are (1) SPG will always be interested in this high quality portfolio, (2) the Hedgies currently owning the GGP stock are opportunistic investors, not long term retail real estate investors, so when GGP is stabilized and only normal market rate returns are likely, these Hedgies become sellers.

      Maybe that is one year, three years or five years. Although given their history, I doubt that Pershing Square or Fairholm Fund are investors in GGP five years from now.

    • 1. ggp price tag too high for simon even at current discounted share price. he will put his namesake company into financial hole.
      -
      This is laughable. Enterprise value is what you have to look at.... and SPG stock would go up if they did an all stock deal and used their cash to reduce debt.

      2. antitrust.
      -
      While an issue if SPG goes alone.... there are likely many players who would like to step up and take enough %% to make it work.
      IMO

      3. bam has de facto control of ggp and will not sell. even if not majority owner, they have flatt as chairman. the hedgies will not be able to exert transfer of control.
      -
      this is the only real problem for SPG imo



      4. major embarrassment for simon. nearly everybody assumed simon was gonna win the last bid. bam outmaneuvered him and made him look like an amateur. he has some pride to protect. lest he look thrice stupid.
      -
      The embarrassment is David lost in buying any top end mall assets. He only got some strip poop.

    • alright, my opinion and your's differ considerably. it's not a topic i like discussing because it is old story and simon is unlikely to come after ggp, imo.

      btw, i was considered sending you a case of ale but i am concerned about your cyborg liver.

    • Fly,

      I am part machine. Machines do not need to sleep. They only need to be oiled. Please send me beer in lieu of oil...

      1)Seriously, it is a misnomer to think that Simon cannot afford to buy GGP. Quite simply, he has the currency in the form of his stock. Further, if he was willing to take on GGP's debtload previously, he would be wlling to take it on now that it is even less that it was previously. Biff is mistaken, and poorly thought out in that regard.

      2)Antitrust is an issue that would be overcome by pooling and selling "overlap" malls. Blackstone has done this previouly with REIT assets, and they would gladly do it again.

      3)BAM does not control more than 50% of GGP stock. The hedge fund boys combined, together with all other general shareowners do hold more than 50%, thus, a change of control is absolutely a possibility (I should always add, I am not saying a buyout of GGP is a certainty, only a possibility).

      4)Simon has no pride to protect for fear of being thought stupid. He just needs to secure future growth for his company. If anything, his large ego would serve to propel him back into the bid process.

      Lastly, I have a taste for Pilsner Urquell, unfilterd, and chilled nicely...

      Thanks in advance!

      Dabqs

    • do you sleep? last post was at 2am. you typically don't post at this hour so was surprised to see response.

      there are too many reasons why i believe simon will not pursue ggp now.

      1. ggp price tag too high for simon even at current discounted share price. he will put his namesake company into financial hole.
      2. antitrust.
      3. bam has de facto control of ggp and will not sell. even if not majority owner, they have flatt as chairman. the hedgies will not be able to exert transfer of control.
      4. major embarrassment for simon. nearly everybody assumed simon was gonna win the last bid. bam outmaneuvered him and made him look like an amateur. he has some pride to protect. lest he look thrice stupid.


      there is probably more.

    • Fly,

      My opinion as to the possibility of a Simon bid has nothing to do with his comment to which you refer. It has everything to do with his need to do a deal to keep SPG growing at a nice clip.

      You write: "only way he will ever put an offer down is if ggp goes into financial problem again."

      That is absurd. He will consider doing a deal if he feels it is in the best interest of his company. It's that simple.

      I certainly did not see that CSC was in financial trouble, did you?

      Dabqs

    • the guy has autism....from what I hear he doesnt have much of a sense of humor....

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