Andrew Bary

Howard Hughes Holdings shares popped in afternoon trading after investor Bill Ackman posted on X that he would announce a "potential transaction" to create a modern version of Berkshire Hathaway.

Then, Ackman's Pershing Square Holdco announced after the market closed that it submitted a proposal to the Howard Hughes board to pay $90 per share to acquire 10,000,000 newly issued common shares of the company.

Pershing Square now owns 37.6% of Howard Hughes' shares outstanding. The revised proposal would increase Pershing Square's stake to 48%.

"If the transaction goes forward, I will become Chairman and CEO, Ryan Israel, CIO, and Ben Hakim President, and we will make available the full resources of Pershing Square to HHH to build a diversified holding company, or one could say, a modern-day Berkshire Hathaway," Ackman said on X, adding that "the new HHH will acquire controlling interests in private and public companies that meet Pershing Square's criteria for business quality."

Before the announcement, Ackman said that the company would "adopt similar, long-term, shareholder-oriented principles to Berkshire, and we intend to hold the stock forever."

The proposal replaces Pershing Square's previous offer to acquire control of the company through the purchase of additional shares and merge it with a newly formed unit of Pershing Square Holdco. Ackman had previously proposed to pay $85 a share for about $1 billion in stock.

Howard Hughes shares closed 6.8% higher on Tuesday at $80.60. In after-hours trading, shares were down 4.8%.

One issue for Ackman was that Howard Hughes said in an investor presentation in November that its net asset value was $118 a share, a figure it termed "conservative."

It could be tough for the Howard Hughes board to agree to a deal with Ackman at a sizable discount to that price. There was speculation that Ackman would boost his bid from $85 a share.

Howard Hughes develops real estate with holdings in Arizona and the Houston area.

Write to Andrew Bary at andrew.bary@barrons.com

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February 18, 2025 16:34 ET (21:34 GMT)

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