Billionaire Bill Ackman helped fund the spinoff of Howard Hughes Holdings Inc. from General Growth Properties in 2010 and has been a big shareholder in the real estate company since then.

But with Howard Hughes Holdings Inc.'s stock $(HHH)$ down about half from its height near $150 a share in 2014, Ackman has remained displeased with the share price of the company where he had served as chairman until this past May.

Now, Ackman has unveiled his vision to form a new business out of Howard Hughes Holdings as a "modern-day Berkshire Hathaway that would acquire controlling interests in operating companies."

Under a deal unveiled Monday, Ackman would become chief executive of a revamped Howard Hughes Holdings. The company's current chief executive, David O'Reilly, will be chief executive of the real-estate business under the name Howard Hughes Corp. Master Planned Communities.

Ackman and the hedge fund that he leads, Pershing Square Management Capital Management, said it would form a unit called Pershing Square Holdco LP to buy the remaining shares of Howard Hughes Holdings that it doesn't already own for $85 a share. The stock will continue to trade after the deal closes.

Howard Hughes Holdings Inc.'s stock rose 9.5% to $78.62 a share on Monday. The company's proposed $85-a-share price is a 38.3% premium to its unaffected stock price and 18.4% above its closing level on Friday.

"The company's stock price performance is obviously extremely disappointing, particularly in light of the high regard we have for this board and the company's superb management team," Ackman said Monday in a letter to Howard Hughes Holdings shareholders.

The deal doesn't come as a big surprise since Howard Hughes Holdings said over the summer it received a buyout offer from Pershing Square Capital Management LP, but the portion about forming a buyout business from it is fresh.

Since the summer, Ackman has been in touch with the company's shareholders and decided to move ahead with the deal, which he said would "accomplish our objective of becoming a larger permanent owner of the company, while also creating a highly attractive cash alternative for shareholders who choose to exit."

Shareholders may also choose to roll their investment into the newly formed entity that will own Howard Hughes Holdings.

Ackman already owns 44% of Howard Hughes Holdings, while Pershing Square employees own about 46% and strategic investors hold about 10%.

All told, the buyout price in the deal amounts to about $1 billion including $440 million from Ackman, $460 million from Pershing Square employees and $100 million from institutional investors and executives.

"We intend to hold HHH stock forever," Ackman said. "Pershing Square's management team and resources would be contributed to HHH, and HHH would invest the excess cash and other financial resources of the company to diversify its business through the acquisition of new operating companies and other assets."

The formation of the Berkshire Hathaway-like $(BRK.B)$ business from Howard Hughes Holdings marks the second effort to create additional value from the company after it completed the spinoff of Seaport Entertainment Group Inc. $(SEG)$ in August.

The move allowed Howard Hughes Holdings to become a pure-play real estate company with developments in Las Vegas, Honolulu, Maryland, Houston and Phoenix.