Mar 23, 2010
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Elliott in talks to join General Growth plan

Mar 23, 2010

By Ilaina Jonas

NEW YORK, March 22 (Reuters) - Elliott Management Corp, a major shareholder and creditor of General Growth Properties, is in talks to join Brookfield Asset Management (BAMa.TO) in its plan for the mall owner to exit bankruptcy as an independent company, a source familiar with the discussion said.

The source did not know how much Elliott, a New York-based hedge fund, would contribute to the deal. Elliott owns a significant portion of the 2006 $2.6 billion term and revolving credit facility used by General Growth (GGP.N), the No. 2 U.S. mall owner, which filed for bankruptcy protection in April 2009.

Also, Bloomberg reported that hedge fund Paulson Investment Co is also in talks to join the group.

So far, General Growth's plan has the backing of Brookfield, Fairholme Capital Management and William Ackman's Pershing Square Capital Management. The discussions include Paulson and Elliott joining or replacing Fairholme, Bloomberg said, citing two people familiar with the talks.

Spokesmen for Paulson and Elliott declined to comment. General Growth could not be reached for immediate comment.

Elliott and its affiliates, Elliott International and International Advisors, together own 16.74 million shares, or 5.3 percent, of General Growth, according to a Securities and Exchange Commission filing.

General Growth owns or has interest in more than 200 malls, including Fashion Show in Las Vegas, Ala Moana Center in Hawaii, and Faneuil Hall Marketplace in Boston.

General Growth is working on a plan to exit bankruptcy backed by some of its largest investors while trying to thwart a $10 billion takeover bid from Simon Property Group Inc (SPG.N), which may raise its offer.

General Growth shares closed at $16.80, up 0.3 percent, or 5 cents, on the New York Stock Exchange.

The case is In re: General Growth Properties Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-11977 (Reporting by Ilaina Jonas; Additional reporting by Paritosh Bansal and Emily Chasan; Editing by Steve Orlofsky)

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