William Ackman, Hedge fund manager and the founder of Pershing Square Capital
Bill Ackman REUTERS

Bill Ackman, the mercurial hedge fund manager of Pershing Square Capital LLP and activist investor, is at it again. Ackman said in a regulatory filing Thursday that his company had been in talks with Simon Property Group Inc. (NYSE: SPG), the largest U.S. mall owner, regarding a takeover of General Group Properties Inc. (NYSE: GGP), its next largest rival.

Under the proposal, Simon would acquire General Growth by exchanging each General Growth share for 0.1765 shares of Simon. The deal would value General Growth's stock at around $28, a premium of around 60 percent based on Simon's closing price on Wednesday of $159.70.

General Growth's stock rose more than 13 percent to $20.87 on Thursday on news of the effort, and the stock has gained nearly 30 percent year-to-date on the company's improving retail rents. But the stock fell around 4 percent to $19.49 in mid-Friday trading as the deal's obstacles became evident.

Ackman, who is already the second-largest shareholder of General Growth, based in Chicago, said the deal was jeopardized by Brookfield Asset Management Inc. (Toronto: BAM), the Canadian real estate and utility company that owns around 30 percent of General Growth and is its largest shareholder.

“Our goals are to ensure that a level playing field exists so that Simon, Brookfield and potentially other parties can compete to acquire the company," Ackman wrote in the filing, adding that Brookfield's presence "effectively handcuffed and gagged" potential sales.

Brookfield said in a statement Friday that it wasn't interested in buying General Growth and that it fully supported the current management. Brookfield said it had previously considered "a variety of possible transactions" for General Growth but ended the talks.

It isn't the first time Simon has attempted a takeover. In 2010, when General Growth was facing bankruptcy following an inability to refinance its debt, Simon offered to buy the company for $33.5 billion, or around $20 per share. But Brookfield triumphed with the support of Ackman. It has since spun off two other companies, Howard Hughes Corp. (NYSE: HHC) and Rouse Properties Inc. (NYSE: RSE), improving its portfolio. The rebound in retail spending and commercial real estate rents have benefited the company, making it an attractive investment once again.