Small Shareholders and Large Ones

http://www.futureofcapitalism.com/2011/01/small-shareholders-and-large-ones

Toward the end of a Wall Street Journal article that appears under the headline "Brookfield Asset Boosts General Growth Stake to 38%" comes the following:

Even so, some analysts noted investors' concern that, at a 38% stake, Brookfield now effectively controls General Growth, putting smaller shareholders at a disadvantage. A Brookfield spokesman said Brookfield wants the same as other shareholders.

"We value our partners in GGP," Brookfield's Andrew Willis said. "We have a governance structure in place that we think should give everybody comfort. We're all aligned as long-term investors in GGP."

The Journal puts this "concern" into the mounts of "some analysts" and "investors," and it gives Brookfield a chance to respond. Even so, it doesn't make much sense. What's the alternative? No big shareholder, so that the company is run by a bunch of directors with little real economic interest in the outcome of their decisions? If the Journal really thinks a single big shareholder is a bad capital structure for a public company, what about the fact that the Murdoch family owns a bug chunk of Journal parent News Corp?

by Ira Stoll  |  Jan 19, 2011 at 12:20 pm Related Topics:  Corporate Governance, Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list