Pershing Square to sell warrants, back off GGP

Pershing Square to sell warrants to Brookfield and become more passive investor in GGP

Associated Press

CHICAGO (AP) -- Pershing Square Capital Management LP said Thursday that it will sell $271.9 million in warrants for mall operator General Growth Properties Inc. to Brookfield Asset Management Inc.

The deal could conclude an intense and drawn-out debate about the Chicago-based General Growth's future.

Pershing and Brookfield were both investors in General Growth and helped pull the company out of bankruptcy in 2010. It was the largest real estate bankruptcy case in U.S. history.

Activist investor William Ackman, who runs Pershing and has an estimated 8 percent stake in General Growth, has long been pushing for the mall owner to sell itself. Brookfield, with an estimated 38 percent stake, has not supported a sale.

General Growth said Thursday that Brookfield will buy warrants from Pershing that represent the right to buy 18.4 million shares of its general stock. Brookfield has offered to sell the warrants back to General Growth at the same price.

As part of the deal, Pershing has also agreed to limit its ownership stake in General growth to no more than 9.9 percent and indicated in regulatory filings that it intends to become a passive shareholder. Brookfield agreed to limit its ownership to 45 percent.

General Growth is a real estate investment trust that has a portfolio that includes 126 malls in the U.S. and 18 malls in Brazil. Its shares fell 3 percent to $19.40 in afternoon trading. The stock has traded $14.25 and $21.25 in the past 52 weeks.

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