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(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.
So in retreating, the New York-based hedge fund manager, known for telling some of America's biggest companies how to make more money for shareholders, explained that the reason for the change of heart hinges largely on Simon.
"In that SPG has chosen not to go forward with that or any other potential transaction with (GGP), and Brookfield Asset Management Inc. and its affiliates have subsequently agreed to modify Brookfield's governance arrangements with (GGP), the Reporting Persons (Ackman and Pershing Square) no longer believe that (GGP)should consider a sale of the Company and it should therefore remain an independent publicly traded corporation," the filing said.
Reporting by Sagarika Jaisinghani in Bangalore and Svea Herbst-Bayliss in Boston; Editing by Maju Samuel and Kenneth Barry