Thursday, May 28, 2009

Ackman and GGP - somebody help me out here

Maybe I am just getting old and confused. I thought Bill Ackman was saying before that bankruptcy was the solution to GGP's woes. Now he is saying that the answer lies in a seven year debt extension. As we know, management was already trying to get extensions before the filing. Or was his real game plan a BK and then a forced extension to the creditors? You tell me, because otherwise I will never know.

I do know this: I hope Ackman's right about the bankruptcy judge for his sake and for others, including the human beings who still work there. I'm not sure a liquidation would be pretty right now. Actually, I am sure it would not. And if he is right, Ackman says that even at a 9.4 cap (compared to what - a 5.3 on the EOP portfolio?) he stands to make a 1300% cash on cash return. Nice money if you can get it.


David Bodamer said...

Ackman stumped for the bankruptcy and then seemingly was going to provide the DIP financing. Then he lost that assignment to Farallon. So that angle is gone. But he still owns a mountain of shares. So he's got to talk it up to try and get a return on his investment, right?

David Stejkowski said...

That's right. He did lose the DIP gig. I absolutely agree that he has to Trump (pun intended) up the show in order to promote (save?) his investment. But even a skeptic like me does not want to see a liquidation. Call it the human element. Nor did Ackman do very well today with his other Target (once again, pun indended).