Ackman drops push for sale of mall operator

Thu Jan 3, 2013 11:29am EST
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By Svea Herbst-Bayliss and Sagarika and Jaisinghani

(Reuters) - After months of trying to play matchmaker between the two largest U.S. shopping mall operators, activist investor William Ackman reversed course on Thursday, saying he is no longer pushing for a sale because one party didn't want to buy.

Since late August, Ackman has argued publicly and often that No. 1 mall operator Simon Property Group (SPG) SPG.N should bid for slightly smaller rival General Growth Properties (GGP)GGP.N, the second-largest mall operator after Simon first made noise about a possible bid for GGP in 2011.

But with no signs of a deal, Ackman, whose $11 billion Pershing Square Capital Management owns an 8 percent stake in GGP, declared himself satisfied with the status quo and said he would return to being a passive investor.

The move comes at a time Ackman is devoting fresh energy to his fight with supplements company Herbalife HLF.N, which he has called a pyramid scheme.

For Ackman, the efforts with the mall operators were close to his heart. Pershing Square's investment in GGP still ranks as the fund's most lucrative ever, providing a 77-fold return after the stock was bought years ago and held through bankruptcy.

A sale to Simon would have helped push GGP's stock price even higher and perhaps prevented Brookfield Asset Management, which owns a 42 percent stake in GGP, from taking full control without paying for it, Ackman argued in regulatory filings and at public conferences.

In October, Ackman said that if a deal were closed between Simon and GGP at that time, the stock price should be trading at $29 a share by year's end.

But General Growth's shares rose only 9 percent since Ackman first urged the company to consider a sale and were trading at $19.41 on Thursday.   Continued...