Bill Ackman’s Pershing Square has offered to take over real estate developer Howard Hughes Holdings for $85 a share. Pershing Square currently owns about 38% of Howard Hughes.
Yesterday, we announced a potential transaction with Howard Hughes Holdings ($HHH) and Pershing Square Holdco, L.P. (“ManagementCo”) – the alternative asset manager of the Pershing Square Funds. Because the formal name of ManagementCo shares a very similar name to our offshore…
— Bill Ackman (@BillAckman) January 14, 2025
In a letter to the Howard Hughes board, Ackman wrote that while he is pleased with the business progress the company has made over the past 14 years, he and other long-term shareholders have been displeased with the stock price performance.
Ackman proposed forming a new subsidiary of Pershing that would merge with Howard Hughes.
The lawyers have been a bit slow so my apologies to Howard Hughes Holdings $HHH shareholders and employees for the delay. But thanks to @X, I don’t need the lawyers to distribute our proposal letter.
Here you go:https://t.co/8CNvYMdo7L
I welcome your feedback.
— Bill Ackman (@BillAckman) January 13, 2025
Stockholders would have the option of receiving more than a majority of their merger consideration in cash at $85 per share, representing a premium of 38.3% to the unaffected stock price and a premium of 18.4% to the closing price last Friday. The balance would be in stock of the post-merger company.
Pershing proposes Howard Hughes merger
Howard Hughes shares jumped 10% to $78.95 a share Monday on the news. Pershing first invested in Howard Hughes in November 2010 in a $250 million rights offering at $47.62 per share.
Bill Ackman's latest target: Real estate developer Howard Hughes, which he's offering to buy for ~$4 billion, despite earning only ~2% per year on it over the past 14 years as a minority investor – https://t.co/DbF9VCYh40 pic.twitter.com/3frcXc8eqX
— Brian DeChesare (@briand_mi) January 13, 2025
Over the last 14 years, Pershing’s investment produced a 35% total return, or a mere 2.2% compound annual return. The company has also paid zero dividends since its inception. Under the proposed deal, Ackman said Howard Hughes would remain unchanged and continue to be managed by the current leadership team led by CEO David O’Reilly.
“We do not intend to make any changes to the HHC organization, its employees, or its long-term strategy,” Ackman said. “We would expect all HHC current employees to remain employed as a result of the Transaction.”
