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Guest kawikaho
Posted

Anyone read Ackman's thesis on GGP?  Apparently, he's pitching a real estate play in similar vein to KMart and Sears.  GGP supposedly owns assets, e.g. malls and real estate, in the tune of 29 billion dollars.  It currently has outstanding debt in the tune of 27 billion dollars.  Both figures are rounded.  I believe he's buying lots of the bonds, and also taking an equity stake to control the board.  His idea is, since the company is cash flow positive, to renegotiate the terms of the debt, so they can pay off the debt and remain solvent.  The company emerges from bankrupcty solvent, and the shares are worth 10-20x more than they were at 1.5 bucks a share.

 

Posted

I reviewed the presentation, all 60+ pages.

I initiated a small holding in it on Monday at 2.32

Seems to have a favorable risk/reward tradeoff. Ackman

did a lot of digging and i am willing to foolow him

on this idea. Sure am glad i did not follow him on TGT

though, the Leucadia guys lost a couple hundred million

on that idea.

I guess i just got lucky, usually if I see a situation where Leucadia and

Ackman in an idea, i woulx jump in!

Guest kawikaho
Posted

What do you guys think is the probability that the common gets wiped in bk court?  That's my fear. 

  • 2 weeks later...
Guest kawikaho
Posted

Thanks for the response.  I also thought about the asset value of the real estate, and wondered if they were being valued realistically.  Probably not.  I'll wait to the restructure happens and see if it's worth buying then.  Besides, the big question is what happens to the common.  Even in "solvent" bankruptcies, like Kmart, they eventually canceled the common anyhow.

Posted

I found Ackman's assumptions on income from the properties and cap rates to be aggressive, especially considering the default event, the environment for buyer financing, the size of the portfolio and the court being in control.

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