Farallon, not Ackman, to Finance GGP

In a bit of an upset, William Ackman will not provide DIP financing to General Growth Properties. Instead, the REIT will be financed by Farallon Partners. This is interesting, in part, because Farallon Partners was Simon Property Group's partner in acquiring Mills Corp. a couple years back.

General Growth Properties Inc. has chosen a group led by Farallon Capital Management to provide up to $400 million of bankruptcy financing to the No. 2 U.S. mall owner.

General Growth chose Farallon Capital's group over Pershing Square Capital Management, a hedge fund headed by investor William Ackman, according to court documents filed in U.S. bankruptcy court in Manhattan on Tuesday.

Under the new agreement, the investors may receive up to 8 percent of the common stock of the reorganized company upon its emergence from bankruptcy. The financing agreement also calls for the lenders to receive a 3.75 percent exit fee.


Open Air Investors LLC, managed by Farallon, agreed to commit $210 million to the financing. Luxor Capital LLC agreed to provide $110 million. Canpartners Investments IV LLC and Perry Principals Investments LLC, an affiliate of Perry Capital, each agreed to $25 million. Delaware Street Capital Master Funds L.P. put up $5 million. Affiliates of institutional investment managers Whitebox Advisors LLC agreed to put up the rest.

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