Yesterday hedge fund heavyweight Bill Ackman, the founder of Pershing Square Capital Management, presented his big idea at the 8th annual Value Investing Congress. He wants the sale of one of his long-time investments, General Growth Properties, to Simon Property Group.
Ackman began his presentation by talking about how he likes real estate investment trust General Growth Properties. Ackman said that the stock has done “quite well” since emerging from Chapter 11 bankruptcy protection.
During his presentation, Ackman said Brookfield Asset Management is getting “creeping control” by increasing its stake in GGP. He noted that if BAM could get its stake to 45% then it will have “de facto” control and that could be harmful to minority shareholders.
However, Ackman said he sees Simon Property Group making a bid for GGP and that’s a good thing.
According to Ackman, Simon Property Group made four offers to acquire GGP. Since Simon’s offer for GGP in 2010, the company has come a long way, he explained.
As a standalone business, GGP is attractive, Ackman said. However, a Simon merger is “substantially superior” to GGP remaining independent.
We’ve included Ackman’s massively detailed presentation in the slides that follow. He includes excerpts from letters he’s written and he even calls out one of General Growth Properties board members for earning fees from Brookfield as an investment banker.