Blackstone Group LP plans to sell 23.4 million shares of General Growth Properties Inc., exiting its investment in the second-biggest U.S. mall owner after helping the company emerge from bankruptcy in 2010.
Blackstone funds will sell the shares, equal to a 2.5 percent stake, in a secondary offering, Chicago-based General Growth said in a statement today. General Growth won’t receive any proceeds from the sale, according to a regulatory filing.
Blackstone, based in New York, joined investors led by Brookfield Asset Management Inc. and Bill Ackman’s Pershing Square Capital Management LP to bring General Growth out of bankruptcy in November 2010. A surge in the landlord’s shares and rising property valuations since then may have prompted the private-equity firm to decide it was a good time to sell, said Craig Guttenplan, a real estate investment trust analyst with CreditSights Inc. in London.
“Blackstone has made a nice profit on its investment and in order to perform for their shareholders, they look for liquidity events,” Paul Adornato, an analyst with BMO Capital Markets in New York, said in a telephone interview. “It’s good for GGP shareholders because it eliminates this overhang down the road.”
General Growth gained 75 percent from its bankruptcy exit through today. Since its restructuring, the company has redeveloped properties and focused on its best-quality malls.
The stock fell 2.2 percent today to $22.82 at the close in New York.
Peter Rose, a spokesman for Blackstone, didn’t immediately return a message seeking comment on the sale.
In January, General Growth purchased $633 million of warrants to buy its shares from Blackstone and Fairholme Funds Inc., which was also part of the investment group.
Brookfield, based in Toronto, is General Growth’s largest investor, holding about 40 percent of the outstanding stock, according to data compiled by Bloomberg. New York-based Pershing owns almost 8 percent of the shares.