The Return of the Activist Investor...minus Chris Hohn

All week headlines have heralded the return of activist investors. However, one name is yet to be heard from - Chris Hohn. Chris Hohn is best known for his involvement in Deutsche Boerse. In the US, he was involved in a high-profile proxy battle against CSX. Unfortunately, since the credit crisis, things seemed to go downhill for Hohn and TCI Funds. Amid the commotion, Hohn's top lieutenants left the firm.

Enter the current environment. Ackman is back at it. He's teamed up with Vornado and built a massive position in JC Penney. Sardar Biglari, the controversial Chairman and CEO of Biglari Holdings, has just offered to buy Fremont Michigan InsuraCorp. Even 3G Capital, who teamed up with TCI in the CSX proxy battle, is back in the mix with an offer to buyout Burger King.

So where is Chris Hohn?

I ask because Hohn has always pursued some interesting companies. His ideal company seems to be one with monopolistic characteristics. Monopolies that are content with the status quo and just need a little push. It will be exciting to see if Hohn pops out of the woodwork in the coming months.

A Closer Look at Howard Hughes

From Amendment 1 of Form 10, Spinco, as it's referred to in the document, is:

"a real estate company created to specialize in the development of master planned communities and other strategic real estate development opportunities across the United States. Our goal is to create sustainable, long-term growth and value for our stockholders. We own a diverse portfolio of properties with a relatively small amount of debt (an amount equal to 11.7% of our total assets as of June 30, 2010) and with near, medium and long-term development opportunities, including our master planned communities, mall development projects and a series of mixed-use development opportunities in premier locations."


"We operate our business in two lines of business: Master Planned Communities and Strategic Development. 
 

        Master Planned Communities.    Our Master Planned Communities segment consists of the development and sale of residential and commercial land, primarily in large-scale projects. We currently own four master planned communities (including four separate communities in Maryland that are commonly, and collectively, referred to as the "Maryland communities") with over 14,000 acres of land remaining to be sold in desirable locations, which in some cases have no land suitable for large-scale residential development nearby. Residential sales, which are made primarily to home builders, include standard, custom and high density (i.e., condominium, town homes and apartments) parcels. Standard residential lots are designated for detached and attached single- and multi-family homes, ranging from entry-level to luxury homes. Commercial sales include parcels designated for retail, office, services and other for-profit activities, as well as those parcels designated for use by government, schools and other not-for-profit entities.

        Strategic Development.    Our Strategic Development segment is made up of a diverse mix of near, medium and long-term real estate properties and development projects, some of which we believe have the potential to create meaningful value. For example, the Hawaii Community Development Authority ("HCDA") approved a 15-plus year master plan that will permit us to transform 60 acres of land at our Ward Centers project in Honolulu, Hawaii into a vibrant and diverse neighborhood of residences, shops, entertainment and offices. Our Strategic Development segment includes nine mixed-use development opportunities, four mall development projects, seven redevelopment projects and eleven other property interests, including ownership of various land parcels and certain profit interests" 

Based on the unaudited Pro Forma Balance Sheet, Shareholder Equity will be just under $2.5 billion.

  

Howard Hughes Co - Ackman's Investment Vehicle?

Rumors already suggested this, but today it became official - Bill Ackman has been named the Chairman of Howard Hughes Co. General Growth Properties is expected to spin off the Howard Hughes Co upon its emergence from bankruptcy, which is expected in early November. The Howard Hughes Co will consist mostly of hard assets that currently generate little to no cash flow. Some notable examples, include, Summerlin and South Street Seaport. It will be interesting to see how active Ackman will be as Chairman. Given his reputation, it's fair to assume that he will actively pursue value enhancing opportunities. Stay tuned!

Disclosure: Long General Growth Properties (GGP)