American billionaire Bill Ackman’s Pershing Square Capital Management has proposed a $900 million bid to significantly boost its stake in Howard Hughes Holdings (HHH) Inc. Ackman stated in a social media post yesterday that the deal could create a “modern-day Berkshire Hathaway (BRK.A).” He added that the $900 million cash infusion will help Howard pursue acquisitions and transition into a diversified holding company, expanding beyond real estate. Following the announcement, HHH stock jumped nearly 7% on Tuesday but fell 4.6% in after-hours trading.
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Ackman Bets Bigger on Howard Hughes
Under the new proposal, Pershing Square intends to purchase 10 million newly issued Howard Hughes shares at $90 each, a 46.4% premium to the $61.46 price before its August 6 announcement of a potential deal. Notably, the hedge fund is financing the investment using its existing cash reserves.
The non-binding offer seeks to increase Pershing Square’s stake from 37.6% to 48% and appoint Ackman as CEO and chairman. Ackman previously chaired Howard Hughes’ board from 2010 to May 2024. With its new offer, Pershing Square also withdrew its January 13 bid to buy 11.8 million Howard Hughes shares at $85 each for around $1 billion.
Meanwhile, Howard Hughes stated that its board and a special committee are reviewing the proposal and advised shareholders to take no action.
Ackman Shows Strong Confidence in Howard Hughes
Howard Hughes, known for developing planned communities and mixed-use properties across the U.S., has faced recent challenges in the commercial real estate market. However, Ackman’s increased investment signals Ackman’s continued confidence in the real estate development company despite market uncertainties.
Ackman, who has been pursuing Howard Hughes since at least August 2024, consistently praises the company’s development strategy and its portfolio of premium properties in locations like The Woodlands in Texas and Summerlin in Las Vegas.
Is Howard Hughes Holdings a Buy?
According to the consensus rating on TipRanks, HHH stock has received a Strong Buy rating, based on three Buy recommendations. The Howard Hughes share price target is $91.33, which is 13.3% above the current trading level.
Year-to-date, HHH stock has gained nearly 5%.
