General Growth buys warrants from Blackstone, Fairholme

NEW YORK Mon Jan 28, 2013 5:26pm EST

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NEW YORK (Reuters) - General Growth Properties Inc (GGP.N), the No. 2 U.S. mall owner, said on Monday it purchased warrants from The Blackstone Group (BX.N) and Fairholme Funds Inc for $633 million, leaving its main investor, Brookfield Asset Management Inc as the only holder of warrants.

The warrants were exercisable into 52 million General Growth common shares at a weighted average exercise price of about $9.37 per share, General Growth said. The warrants were scheduled to expire in November 2017. The sale means Blackstone and Fairholme no longer hold any warrants to acquire General Growth's common shares.

Shares of General Growth closed on Monday down 0.8 percent at $19.53 per share.

Blackstone, Fairholme, Pershing Square Capital Management LP and Brookfield had been granted the warrants as part of their package to help General Growth exit bankruptcy in 2010 as a stand-alone company.

Earlier this month, Brookfield acquired about 18.4 million General Growth warrants held by Pershing Square Capital for $271.9 million. Brookfield, which owns 42 percent of General Growth, offered General Growth the opportunity to acquire the same warrants for the same price. The Chicago-based mall operator said on Monday that its independent directors declined the offer.

Brookfield now is the sole holder of the company's remaining outstanding warrants which are exercisable into about 83 million common shares of the company at a weighted average exercise price of about $9.53 per share.

General Growth had 939 million shares outstanding as of November 1, 2012.

(Reporting By Ilaina Jonas; Editing by Tim Dobbyn)

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