Billionaire investor Bill Ackman said Monday that Pershing Square will increase its stake in real estate giant Howard Hughes Holdings by $1 billion, taking the company private and creating a “modern-day Berkshire Hathaway.” Ta.
In a letter to investors, Ackman said Pershing, which owns 37.6% of HHH, offered $85 per share to buy the remaining stake.
“With apologies to Mr. Buffett, HHH will become a modern-day Berkshire Hathaway, acquiring control of an operating company,” wrote Ackman, 58, who is estimated to be worth $9.2 billion.
Shares of Howard Hughes, one of Mr. Pershing's longest-held investments, rose 10% to $78.56 after the opening bell.
In the proposed transaction, Pershing Square's unit would buy 11.8 million shares from Howard Hughes' non-Pershing Square-affiliated shareholders for $1 billion, while the real estate developer would buy up to 5.9 million shares at $85 per share. Commenced $500 million share buyback. .
Ackman said any excess cash remaining on the new entity's books or resulting from transactions will be used to invest in “new companies and assets.”
Buffett, the world's eighth richest man with an estimated net worth of $148 billion, began investing in textile manufacturer Berkshire Hathaway in 1962 and went on to grow the company into one of the most successful investment funds in history. Ta.
Howard Hughes was spun off from General Growth Properties, a real estate investment trust, in 2010 and owns and manages commercial, residential, and mixed-use real estate properties in the United States. Its market value was $3.6 billion, according to data compiled by LSEG.
Ackman called HHH's stock market performance “extremely disappointing” and said he would appoint himself chairman and chief executive officer of the new investment vehicle.
“Like other long-term shareholders and the board of directors, we are dissatisfied with the performance of the company's stock price,” Ackman said in the letter.
Howard Hughes did not immediately respond to a request for comment.
In his letter, Ackman said Howard Hughes shareholders will have the option of receiving the full payment in cash or “rolling over” all or part of their stock to the combined company.
Mr. Ackman had been personally involved with Howard Hughes for 10 years and had served as chairman since 2010 before stepping down from the company's board in April.
The company's current CEO, David O'Reilly, will remain as part of the company's new real estate division, branded Howard Hughes Corporation.
In July, Howard Hughes spun off its entertainment division, which includes South Street Seaport and the Las Vegas Aviators baseball team.
“Ultimately, our company's
“In August of last year, we made the decision to consider taking the company private,” Ackman added.
“In honor of Howard Hughes Holdings’ namesake, one of the world’s greatest aviators and entrepreneurs, let’s give this bird wings.”
Ackman said the company may invite a “small consortium” of partners to participate in the deal. A multi-year lock-up agreement must then be signed.
The expression of interest in a deal to buy Howard Hughes' remaining shares was filed after Pershing Square USA's failed IPO on the New York Stock Exchange last year.
The billionaire scrapped plans to float the closed-end fund in July, citing a lack of enthusiasm from investors. Closed-end funds mean shareholders can only exit if someone else buys their shares.
Ackman has traditionally supported Democratic politicians, but he became a vocal supporter of Donald Trump on Elon Musk's social media platform X.
He used his account to explode anti-Israel protests on American college campuses and shake up “DEI” employment policies.
