MIAMI--(BUSINESS WIRE)--The Fairholme Fund (NASDAQ:FAIRX), a series of Fairholme Funds, Inc., has agreed to sell the Fund’s current position in General Growth Properties, Inc. (NYSE: GGP) common stock in a transaction valued at approximately US$1.7 billion based on the January 14th closing price per share of US$15.10. The purchase price to be paid by Brookfield Asset Management Inc. will consist of approximately US$804 million in cash and US$907 million in Class A limited voting shares of Brookfield Asset Management Inc. (NYSE: BAM), valued at the January 14th close of US$32.99. The Fairholme Fund will retain its existing warrants to purchase common stock of General Growth Properties and the right to receive from GGP a US$0.38 per share cash and stock dividend payable on January 27, 2011. Subject to certain closing conditions, the transaction is scheduled to close on or after January 25, 2011.
"We are proud to have done our part to assist in the successful restructuring of GGP," says Bruce Berkowitz, founder and Managing Member of Fairholme Capital Management, L.L.C., investment manager of the Fairholme Fund. "We are excited now to become a shareholder in Brookfield Asset Management Inc.”
Fairholme was advised on the sale and the GGP restructuring by Sullivan & Cromwell LLP, on Canadian law matters by Blake, Cassels & Graydon LLP, and on certain regulatory matters by Seward & Kissel, LLP.
Fairholme Capital Management, L.L.C. is registered with the United States Securities and Exchange Commission as an investment adviser. As of January 14, 2011, the firm has approximately $22 billion of assets under management. Fairholme Capital Management is the investment manager to each of The Fairholme Fund, The Fairholme Focused Income Fund, and the Fairholme Allocation Fund. Operating and investment decisions for Fairholme Capital Management and the Funds are made by Bruce R. Berkowitz, in consultation with Charles M. Fernandez. Mr. Berkowitz is the founder and Managing Member of Fairholme Capital Management and the President and a Director of Fairholme Funds, Inc. Mr. Charles M. Fernandez is the President of Fairholme Capital Management and the Vice-President and a Director of Fairholme Funds, Inc.
Investing in the mutual fund involves risk including loss of principal. Fairholme Fund’s investment objectives, risks, charges, and expenses should be considered carefully before investing. The Fund’s prospectus contains this and other important information about the Fund and may be obtained by calling shareholder services at 866-202-2263 or visiting our website at www.fairholmefunds.com. Read it carefully before investing.
The Fairholme Fund is non-diversified, which means that it invests in a smaller number of securities when compared to more diversified funds. Therefore, the Fund is exposed to greater individual stock volatility than a diversified fund. The Fund also invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. The allocation of investments among the different asset classes, such as equity or fixed-income classes, may have a more significant effect on the Fund’s net asset value when one of these classes is performing more poorly than others. The Fund may invest in lower-rated securities, which may have greater market risk. These strategies expose the Fund and its shareholders to greater risk of loss from adverse developments affecting any portfolio company.
Shares of the Fund are offered through Fairholme Distributors, Inc., a member of The Financial Industry Regulatory Authority, which is the largest independent regulator for all securities firms doing business in the United States.