General Growth Properties (NYSE: GGP) shares surged higher after activist investor Bill Ackman’s investment was followed by another large purchase by Morgan Stanley. The stock nearly doubled at the end of November when Ackman’s Pershing Square disclosed a 19.9% ownership stake in the troubled real estate investment trust. The rally was extended this week after Morgan Stanley increased its stake to 5.1%, presumably upon making a similar conclusion to that of the hedge fund.

General Growth Properties stock has plummeted over the past two months as investors grew increasingly concerned that the heavily leveraged mall operator may be unable to refinance billions of dollars of debt coming due late in 2008 and 2009.  The REIT had hired the Sidley Austin law firm as a financial advisor to refinance its hefty debt, but very little progress appears to have been made.

Investors are now speculating that Pershing Square and Morgan Stanley may be betting on a change of heart on the part of banks. The bailout packages designed to encourage lending may make the prospects of a refinancing more probable. Alternatively, others are betting that Morgan Stanley, Pershing Square or other large institutions/funds may be interested in providing financing using successful properties as collateral. In fact, Pershing Square did something like this with Borders Group where it held the international division as collateral for a high-interest line of credit to keep the company going…

Related Companies
Simon Property Group Inc. (SPG)
Federal Realty Inv. Trust (FRT)
Saul Centers Inc. (BFS)

Consolidated-Tomoka Land Co. (AMEX: CTO) directors may face some competition at the company’s next annual meeting. Wintergreen Advisors, which owns a 25% stake in the firm, made several proposals aimed at improving corporate transparency and generating shareholder value in a regulatory filing with the Securities and Exchange Commission.

Wintergreen believes that Consolidated-Tomoka is sitting on several promising properties, including its Daytona properties and others in Volusia county. The hedge fund has held discussions with the company on maximizing the value of these properties through direct development or partnerships, but no significant progress has yet been made.

On November 20, Wintergreen delivered three shareholder proposals to Consolidated-Tomoka designed to add board members and improve corporate governance. These proposals included the nomination of four independent candidates to the board, a provision requiring annual election of all directors, and a provision requiring the chairman of the board to be an independent director.

Wintergreen’s nominations to the board of directors include four highly qualified individuals who are independent from the hedge fund and who they believe possess the expertise necessary to work to restore and enhance shareholder value. Furthermore, the nominees are committed to exploring all alternatives to increase shareholder value.

Wintergreen believes that its second proposal to hold board elections annually is the strongest way for shareholders to influence the directors of any corporation. The current board’s staggered elections prevent shareholders from effecting change inside of three years as only one third of the board is up for election per year.

Finally, Wintergreen believes that its third proposal to mandate an independent chairman of the board is the best way to ensure that management is treated objectively by shareholders. In fact, the National Association of Corporate Directors includes independent board leadership as one of its key principles to strengthen corporate governance.

Wintergreen’s proposals have been seen in a positive light by many shareholders as the price edges higher with each SEC filing threatening action. The hedge fund’s large stake in the firm also ensures that its voice will be heard if it attempts a coup to take over the board as it has hinted. All in all, this is good news for shareholders who could finally see some value unlocked in Consolidated-Tomoka.

Related Companies
The St. Joe Company (JOE)
Avatar Holdings Inc. (AVTR)
Forestar Group, Inc. (FOR)

Yahoo Inc. (NDAQ: YHOO) shares are trading lower despite news of an increased investment by billionaire activist Carl Icahn. The corporate raider had pressured the firm to sell itself to Microsoft for a substantial premium to the current market price. Since Microsoft's offer was rebuffed, shares of Yahoo have fallen sharply as the economic crisis deepened.

So, why has Carl Icahn increased his investment despite the rejected bid? Unfortunately, the actions of almost all activist investors and hedge funds are hidden, and Carl Icahn is no different. Despite the lack of information, there is no shortage of speculation on the part of shareholders and the media.

Some believe that the timing of Carl Icahn's investment may indicate a new CEO announcement may be coming up soon. Others insist that Microsoft may be ready to come back to the table to negotiate on a new price - lower than the previous one but higher than the current market price. And finally, others believe a new partnership may be in the works with Google or other players.

Some shareholders believe that Carl Icahn's motives may be more financial than activist. Currently, Yahoo shares are trading on the cheap with a lot of cash on the books and no long-term debt. Carl Icahn's purchase comes out at just above book value  while Yahoo's brands and traffic continue to remain strong.

But regardless of the motive, Carl Icahn's investment is good news for shareholders...

Related Companies
Google Inc. (GOOG)
Microsoft Corporation (MSFT)
Time Warner Inc. (TWX)