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ggp may become hedge fund battleground:
http://www.reuters.com/article/idCAN0621489320100407?rpc=44
haven't heard anything about simon backing out. maybe they just don't want to seem too anxious or maybe they are just being very deliberate. at any rate, the clock is ticking on them with the cornerstone bid before the court for consideration. we've waited this long and it should be coming to a head in the next three weeks. patience will win out.
ggp files cornerstone agreement with sec:
http://www.sec.gov/Archives/edgar/data/895648/000110465910018597/0001104659-10-018597-index.htm
safety net/residual value
when general growth filed for its bk, it did not include its managment company and some 38 properties in the filing. therefore, even if those entities which ggp placed into bk were wiped out and the shareholders completely lost, those equity holders would still have retained the residual value in the management company and the 38 properties which were not placed into bk. point here is that ggp's stock price would never have gone to zero which is why i felt a great deal of comfort buying into ggp stock in march '09 prior to its bk filing.
now, consider the following:
POSTED: 01:08 a.m. HST, Jan 05, 2010
The parent of interisland carrier go! and the 75 percent owner of the go! Mokulele joint venture, submitted paperwork early today in federal Bankruptcy Court for the Southern District of New York. However, the go! Mokulele venture, which operates as a separate entity, did not file for bankruptcy and service will be unaffected in Hawaii.
seems to me that even if mag were to totally fail in its bk undertaking that the shareholders would still have residual value in the go!/mokulele jv.
anyone have any clue what the value of that jv is on a per share basis. whatever that value is seems to me to be a "guaranteed" floor value of the mesa common stock. if the go!/mokulele jv is valued over $0.11/share, then we are trading at a discount right now.
court docket, exit plan link:
it's 550 pages long. this is what we've been anticipating.
http://www.kccllc.net/documents/0911977/0911977100331000000000022.pdf
that was my point in saying they would be a feeder. bring more into hawaii for mesa's inter-island routes.
allegiant may provide feeder to go in hawaii:
http://www.lasvegassun.com/news/2010/mar/05/las-vegas-based-allegiant-air-plans-flights-hawaii/
based on the way you are asking the question, ggp will dilute. however, by issuing additional shares AND retiring unsecured debt, the impact on pps will not be severe, imo.
for anyone entering this stock in double digits, the impact will be greater. for those in below a $1/share, in a way, who cares? there are a number of investors sitting on 30 to 40 baggers already. if the stock goes to $25 instead of $30, it's not a big deal.
remember, even if the stalking horse "deal" gets court approval, the warrants for ggp would be for 7 years at a $15/share level. that assumes the ggo/ggp split. if the split scenario, the ggp is valued at $10/share and the warrants are in the money at $15/share.
while i would rather not see the warrants, i like the fact the unsecured debt drag on the balance sheet will go away. if ggp emerges as a standalone and you are holding for 2-3 years, i really don't think you are going to care one way or the other.
ggp is not buying back its own shares, ggp is seeking investors to buy ggp shares.
"The idea is that a diverse group of capital sources would have more appeal to the dedicated real estate investment trust investors General Growth is trying to line up to buy their shares as part of the plan to emerge from bankruptcy, the source said."
suit for failure to accept simon bid dismissed/stayed:
http://www.kccllc.net/documents/0911977/0911977100324000000000018.pdf
back and forth bid scenarios:
http://www.reuters.com/article/idCNN2419119320100324?rpc=44
c1k, you wrote:
"Part of the POR is really a request by the company to ask for forgiveness of some debt and how its going to pay remaining debt. Of course, whats most important to all of us, is that a POR will also state what the plan is for common shares."
the reason that general growth stock was able to soar was the fact that ggp's stated intent is to make all debt holders (secured as well as unsecured) whole. with secured debt restructured and unsecured debt paid in full, that is what leaves common stockholders somewhat in the drivers seat regarding approval of ggp's por when it gets filed and then goes through the approval process.
ggp is not scheduled to file its por until july 15th, some 15 months after its bk filing.
i would fear that if mag were to ask for debt forgiveness that would be very bad for common stockholders since debt stands in line ahead of equity.
if by debt forgiveness you just mean the ability to reject leases, then i would agree. however, it you mean secured as well as unsecured debt, then i think common would get slaughtered.
no matter, there will be plenty of time between now and a por filing to ride this stock.
regards, a mostly lurking, but long mesaq holder
new interest, bam combination maybe w/o fairholme:
http://www.reuters.com/article/idCAN2222036020100322?rpc=44
ggp returned to the nyse on march 5, less than one year after it filed for bk. things moving along nicely with their process.
http://finance.yahoo.com/q/hp?s=GGP
berkowitz' long leash at fairholme:
http://www.businessweek.com/news/2010-03-11/berkowitz-gets-long-leash-at-fairholme-to-pursue-mall-offer.html
first post-confirmation status report:
http://www.kccllc.net/documents/0911977/0911977100311000000000041.pdf
simon annual rpt:
haven't read through the whole thing yet, looking for any mention of the ggp bid.
Results Overview
Diluted earnings per unit of limited partnership interest, or units, decreased $0.82 during 2009, or 43.9%, to $1.05 from $1.87 for 2008. The decrease is primarily due to losses on asset sales and impairment charges. These included a $140.5 million, or $0.44 per unit, other-than-temporary impairment charge related to our investment in Liberty International, PLC, or Liberty, a U.K. REIT. We recorded the other-than-temporary charge in the second quarter of 2009 due to the significance and duration of the decline in quoted fair value, including the related currency exchange component, below the carrying value of the securities. In the fourth quarter of 2009, we also recorded adjustments in the carrying values of three underperforming assets, including one consolidated operating property and two joint venture assets, the write-off of certain predevelopment costs related to projects that we no longer plan to pursue due to economic conditions, and adjustments to carrying values for certain parcels of land, amounting to $88.1 million, or $0.27 per unit, net of related tax benefit and noncontrolling interest share. We also recorded net losses related to the sale of assets and interests in unconsolidated entities of $30.1 million, or $0.09 per unit. For 2009, earnings per unit were diluted by approximately $0.21 per unit as a result of Simon Property's two equity offerings and from the units we issued in the quarterly distributions. For 2008, we recorded a $20.3 million, or $0.07 per diluted unit, loss on extinguishment of debt related to our redemption of the 7% MandatOry Par Put Remarked Securities, or MOPPRS. In addition, we recorded impairment charges of $21.2 million, or $0.07 per diluted unit, during 2008.
In the United States, our business fundamentals were relatively stable, except for tenant sales psf which were down across the portfolio, and were dependent upon asset type, geographic location, and mix of specialty and luxury tenants. Average base rents for the regional mall and domestic Premium Outlet portfolios were relatively stable for 2009. The regional malls average base rent ended the year at $40.04 psf, or an increase of 1.4% over 2008. The domestic Premium Outlets average base rent ended the year at $33.45 psf, or an increase of 21.0%. The stability of the occupancy, rent psf, and releasing rental spread fundamentals contributed to the growth in our operating results despite the adverse economic conditions affecting our tenants and retail consumers.
Internationally, in 2009, we and our joint venture partners opened one additional center and expanded one existing Premium Outlet Center in Japan which added an aggregate 396,300 square feet of retail space to the international portfolio. Also in December 2009, we recognized a loss on our joint venture interests in our shopping centers in China. We sold our interests to affiliates of our Chinese partner for approximately $29 million, resulting in a loss of approximately $20 million.
On February 4, 2010, we and our partner in Simon Ivanhoe S.à.r.l , or Simon Ivanhoe, Ivanhoe Cambridge Inc. , or Ivanhoe Cambridge, entered into a definitive agreement to sell all of the interests in Simon Ivanhoe which owns seven shopping centers located in France and Poland to Unibail-Rodamco. The joint venture partners will receive consideration of €715 million for their interests, subject to certain post-closing adjustments. We expect our share of the gain on sale of our interests in Simon Ivanhoe to be approximately $300 million. The transaction is scheduled to close during the first half of 2010, subject to customary closing conditions and regulatory approvals.
We and Ivanhoe Cambridge have the right to participate with Unibail-Rodamco in the potential development of up to five new retail projects in the Simon Ivanhoe pipeline, subject to customary approval rights. We will own a 25% interest in any of these projects in which we agree to participate.
50
--------------------------------------------------------------------------------
Table of Contents
Our effective overall borrowing rate at December 31, 2009 increased 50 basis points to 5.62% as compared to 5.12% at December 31, 2008. This increase was primarily due to a $1.4 billion increase in our portfolio of relatively higher rate fixed rate debt. Our financing activities for the year ended December 31, 2009, included:
•
decreasing borrowings on our $3.5 billion unsecured revolving credit facility, or the Credit Facility, to approximately $446.1 million as of December 31, 2009. The ending balance on this facility was entirely comprised of the U.S. dollar equivalent of Euro and Yen-denominated borrowings. On December 8, 2009, we entered into a new unsecured revolving corporate credit facility providing an initial borrowing capacity of $3.565 billion. The new credit facility contains an accordion feature allowing the maximum borrowing capacity to expand to $4.0 billion. The new credit facility matures on March 31, 2013. Borrowings on the new credit facility were not drawn until January 5, 2010 when the Euro and Yen-denominated borrowings on the Credit Facility were transitioned to the new credit facility.
•
issuing $650.0 million in 10.35% senior unsecured notes due 2019. We used the proceeds of the offering to reduce borrowings on the Credit Facility.
•
issuing $1.1 billion in 6.75% senior unsecured notes due 2014. We used the proceeds of the offering for general corporate purposes.
•
redeeming five series of maturing unsecured notes totaling $900.0 million which had fixed rates ranging from 3.50% to 8.63%.
•
borrowing $400.0 million on a loan which matures on August 1, 2016 and bears interest at a fixed rate of 8.00%. This loan is secured by cross-collateralized, cross-defaulted mortgages on Greenwood Park Mall, South Park Mall, and Walt Whitman Mall.
On January 12, 2010, we commenced a cash tender offer for any and all senior unsecured notes of ten outstanding series with maturity dates ranging from 2011 to March 2013. The total principal amount of the notes accepted for purchase on January 26, 2010 was approximately $2.3 billion, with a weighted average duration of 2.0 years and a weighted coupon of 5.76%. We purchased the tendered notes with cash on hand and the proceeds from an offering of $2.25 billion of senior unsecured notes that closed on January 25, 2010. The senior notes offering was comprised of $400.0 million of 4.20% notes due 2015, $1.25 billion of 5.65% notes due 2020 and $600.0 million of 6.75% notes due 2040. We will report a $165.6 million charge to earnings in the first quarter of 2010 as a result of the tender offer.
http://www.sec.gov/Archives/edgar/data/1022344/000104746910002107/a2197040z10-k.htm#en72801_item_7._management_s_discussio__ite03668
ackman still all in:
taken from yesterday's sec filing for pershing sq.
Item 1. Security and Issuer
This Amendment No. 6 (this “Amendment No. 6”) amends and supplements the statement on Schedule 13D, as previously amended to date (the “Schedule 13D”), by (i) Pershing Square Capital Management, L.P., a Delaware limited partnership (“Pershing Square”), (ii) PS Management GP, LLC, a Delaware limited liability company (“PS Management”), (iii) Pershing Square GP, LLC, a Delaware limited liability company (“Pershing Square GP”), and (iv) William A. Ackman, a citizen of the United States of America (collectively, the “Reporting Persons”), relating to the common stock, par value $.01 per share (the “Common Shares”), of General Growth Properties, Inc., a Delaware corporation (the “Issuer”). Capitalized terms used herein but not defined herein shall have the meaning set forth in the Schedule 13D.
As of March 9, 2010, the Reporting Persons beneficially owned an aggregate of 23,953,782 Common Shares, representing approximately 7.5% of the outstanding Common Shares. The Reporting Persons also have additional economic exposure to approximately 54,907,669 Common Shares under certain cash-settled total return swaps (“Swaps”), bringing their total aggregate economic exposure to 78,861,451 Common Shares (approximately 24.9% of the outstanding Common Shares).
the beauty of the new offer:
with the $15/share floor established, if simon were to offer $20/share, how might fairholm/bam/pershing respond?
if one assumes that f/b/p have $3 billion of unsecured debt which they are willing to exchange for $15 stock, and that ggp will just pay off the remaining unsecureds in cash, that means that an additional 200 million shares would need to be issued to take out f/b/p.
if simon offers $20/share, then f/b/p could say they would trade their unsecured debt for $20/share which means that they would get 150 million shares.
if simon counters with $25/share, then f/b/p could say they would trade their unsecured for $25/share and get 120 million shares.
at some point, f/b/p will have a number in mind over which they do not want to trade unsecured debt for shares but i have to believe that number is north of $20-$25 share.
this might set up a nice bidding war and f/b/p can choose not to come up with any additional money so long as they are willing to accept less shares for their debt exchange.
with f/b/p saying they would like to proceed to documentation by next week, that will put a lot of pressure on anyone who wants to bid for ggp.
stay tuned as this reality show unfolds in front of our eyes.
fairholme/pershing sq. details:
http://www.valueplays.net/2010/03/09/fairholme-and-pershing-term-sheet-to-general-growth/
i either didn't stay up late enough or read deep enough. wasn't aware of ackman's resignation when i posted last evening. while it's obvious that ackman needed to resign if pershing was getting more deeply involved in a new deal structure (remember simon's comments re: conflict over the bam "guarantee" by pershing), this could insert a new level of uncertainty in the equation.
with ackman on the board, pershing could not buy or sell ggp stock at will. he was closely controlled by sec requirements as an insider. with his resignation, pershing can now buy or sell on a moment's notice and ordinary shareholders will not get any heads up. believe there was more stability in the stock with ackman on the board. this move makes me question a long term hold scenario for pershing.
no matter what he does, owning or controlling 25% of the common stock still keeps his interests in line with smaller shareholders. now, more than ever, need to keep watching. if you see the stock price run up to where you think it is fully valued (at this time, not two or three years out) then you should be prepared to lock in your profits.
herd mentality is soon to be out the window. look at your own situation and move accordingly.
still long ggp but watching everything as it evolves.
nice pre-market move this morning, currrently up over $0.50. this should start to shake out any serious bidders. no more simon bs types of bids. fires should be lit under a number of pots, let the stew boil over.
i was surfing and just came back to ggp and saw this news. linked it to post here and saw it was already posted. my take, if it is true, it that this is great news. while i think it will elicit more bidding, i ultimately want ggp to survive as a stand alone company under current management with a bam, pershing, and now possibly fairholme jv.
if these guys can pay off the unsecureds who do not want to play nice and then let the others convert to equity, i think this could really be a phenominal cash machine down the road.
bam seems to have their balance sheet in order and if they can prevail on ggp to pay off or pay down some of the secured debt and strengthen the balance sheet this should be a sweet investment, post bk.
i just hope ggp has been sufficiently chastened about leverage and how quickly it can come back to bite you in the rear. bigger is not always better, especially if it has to be done with leverage. the world economy is still very very fragile and the best way to be able to ride out any more economic tsunamis is to make sure you can float above it all.
i just think this is all very encouraging and it will sure be fun to see how it plays out.
i still need to rebalance because of my outsized ggp holdings but my plan was to wait until the por was approved to begin that process. i'm still inclined to stick with that plan. all of my ggp stock has now been held for in excess of one year so i am in the capital gains position. that said, i will probably sell the 40% of my ggp position which is in ira's and then sell 2k or 3k of the 15k shares i have in my taxable account and then let the other 12k shares ride and collect dividends and hopefully see some significant appreciation.
as i posted earlier this evening, forbes reported that ggp was the 3rd best stock for the period from march 9, 2009 through february 28, 2010. since my purchased were from march 3rd through march 7th of 2009, i have done modestly better. what a ride it has been.
nonetheless, it is scary having so much tied up in this one stock but all indicators point to stability for ggp, absent another horrible leg down or some type of geopolitical disaster. i'm just hoping that the por is filed before any shat hits the fan which could derail this train.
fingers crossed, so much is completely out of our hands. just need to stay on top of the news and be ready to move on short notice if need be.
bk no barrier to nyse listing:
from reuters
Bankruptcy no barrier to entry for General Growth stock
Mar 5, 2010 13:52 EST
chapter 11 bankruptcy protection | General Growth | general growth properties | john bucksbaum | market capitalization | New York Stock Exchange | pershing square capital management | w r grace
There were more than a few quizzical looks in the newsroom this week when General Growth Properties said it would again list its shares on the New York Stock Exchange. Wouldn’t bankruptcy preclude the stock from being on the Big Boad? Not only does being bankrupt not keep your stock from being traded, but from the reaction of investors, it won’t even make your stock a sell.
Ilaina Jonas reports General Growth is not alone as having its shares trade on the Big Board while operating under Chapter 11 bankruptcy protection. A representative of the exchange did not know how many of the approximately 2,425 companies trading on the New York Stock Exchange were in Chapter 11. But a handful, such as W.R. Grace, have continued to trade on the Big Board post-bankruptcy.
General Growth is a bit different, still. It was delisted after its April filing and has now returned. The company has a market capitalization of over $4 billion, making it the 15th-largest publicly traded REIT of nearly 130 REITs traded on the NYSE. About half of General Growth’s shares are owned by hedge fund manager William Ackman of Pershing Square Capital Management and by Chairman John Bucksbaum and his family or family’s trust. Management is still calling the shots, even from bankruptcy, since the pervasive view – though not officially the view of the court yet – is that the company was sent into the tank by the credit crisis and not anything fundamentally wrong with its business. There is even an equity committee taking part in the bankrtupcy proceedings.
Clearly the stain of Chapter 11 is not worrying investors. The stock, on its re-debut, is up nearly 3 percent in early afternoon trade.
ggp's nolan on cnbc at 7:45am today
ggp exclusive extended to july 15:
http://www.reuters.com/article/idCAN0324324320100304?rpc=44
maybe ackman will now tell simon to take his thumb out of his mouth and his head out of his bum.
ggwpq meets nyse listing requirements:
from reading the attached, looks like ggwpq can succeed in its request to relist on the nyse. inspite of the fact they are in bk, they meet the requirement of a "going concern", as well as the others listed. tomorrow and friday should be very interesting.
http://www.nyse.com/regulation/nyse/1147474807344.html
ggp's roadmap seeking extn. to exclusive period:
this is a must read to understand what is going to happen on wednesday in court.
http://www.kccllc.net/documents/0911977/0911977100301000000000003.pdf
ggp Q4 and full year results:
http://finance.yahoo.com/news/General-Growth-Properties-Inc-bw-1162186679.html?x=0&.v=1
norway oil fund to invest in r/e
norway's $440 billion sovereign wealth oil fund has been given the ok to invest up to 5% of its assets in traditional real estate. maybe another sign that r/e is at or near a bottom. this is probably a good sign on one which ggp can use in support of its efforts to tap the equity markets for the recap and its exit from bk.
http://www.businessweek.com/news/2010-03-01/norway-gives-approval-for-oil-fund-to-buy-real-estate-update1-.html
kinda betwixt and between
with the stock hovering around $13, it seems like the market doesn't know whether or not to believe simon's $9 offer or ggp/bam's $15 counter. unless another bid comes out between now and wednesday's court date, hard to see this moving hard one way or the other.
if the court approves the extension and also approves the bam guarantee, then it seems this stock should settle in the $14's until such time as a better offer is made.
will continuing to troll for news but wednesday may be our next date of interest if the others who have signed nda's also wait for wednesday's court ruling.
bam and bpo create new reit:
repositioning for ggp jv?
http://www.canadaeast.com/rss/article/967573
ggp responds to shareholder lawsuit:
seeks contempt of court against attorneys and young; and,
seeks legal fees and expenses incurred to respond.
http://www.kccllc.net/documents/0911977/0911977100225000000000015.pdf
my guess is that these bozos who brought the suit are screwed.
from blackstone's Q4 filing:
PRESS RELEASE OF THE BLACKSTONE GROUP L.P. DATED FEBRUARY 25, 2010
Exhibit 99.1
The Blackstone Group Reports Fourth Quarter and
Full Year 2009 Results
Commercial real estate trends in the U.S. and Europe showed continued signs of stabilization. For office properties, vacancy rates appear to have stabilized, with some markets showing signs of decreasing vacancies. In hospitality, demand appears to have bottomed as well, although pricing remains pressured. RevPAR (Revenue Per Available Room), an important hospitality industry metric, continued to decline, but that decline clearly moderated in the fourth quarter of 2009.
Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “It has been about 17 months since the collapse of Lehman Brothers and the full onset of the global financial crisis. Equity and debt markets globally have continued to heal from their lows about a year ago although there has been some recent turbulence in January and February, most companies have reduced expenses and inventory levels, the cost of borrowing has declined and the availability of credit is increasing selectively. We believe the worst is behind us, although a recovery in Western economies could be gradual and uneven. We see many opportunities to deploy our substantial available capital across each of our asset management businesses with attractive potential risk-return for our fund investors.”
check out last trade: hovde covering its short?
http://www.stockwatch.com/utilit/utilit_snapsh_result.aspx
sorry, this is the press release:
http://www.ggp.com/Company/Pressreleases.aspx?prid=489
ggp's press release:
http://www.ggp.com/content/Docs/TermSheet_22410.pdf
term sheet for bam's ggp investment:
http://www.ggp.com/content/Docs/TermSheet_22410.pdf