- Billionaire investor Bill Ackman has offered to purchase additional shares in Howard Hughes Holdings, with the intention of turning the real estate company into a Buffett-like conglomerate.
Pershing Square Capital Management founder and Chief Executive Bill Ackman is proposing a merger to form a company that he thinks could emulate Warren Buffett’s Berkshire Hathaway.
His hedge fund has offered to purchase about 11.8 million shares in Howard Hughes Holdings (HHH) for $85 apiece, a premium that would mostly be paid in cash. Pershing would form a subsidiary that would merge with the real estate developer. It would be a $1 billion takeover simultaneously with a $500 million share repurchase for Howard Hughes.
The billionaire laid it all out in a letter to the board of directors on Monday with a name-drop.
“With apologies to Mr. Buffett, HHH would become a modern-day Berkshire Hathaway that would acquire controlling interests in operating companies,” Ackman wrote, referring to the conglomerate’s longtime billionaire CEO and chairman.
Berkshire Hathaway is a holding company that acquires and invests in lots of other businesses across several sectors—from Brooks, a running shoe and apparel brand, to Home Services of America, a residential real estate company, to See’s Candies, and insurance giant Geico.
The offer stemmed from Ackman’s displeasure at the Texas-based developer’s stock price. HHH stock was up about 9% on Monday, but it’s down around 24% over the last three years.
“While we are pleased with the substantial business progress Howard Hughes Holdings has made over the more than 14 years since it went public, we, like other long-term shareholders and this board, have been displeased with the Company’s stock price performance,” he wrote.
Pershing holds about a 38% stake in Howard Hughes, and Ackman was chairman of the developer for more than a decade until he stepped down last year. Depending on how many investors accept its offer, Pershing will own 61% to 69%.
If the merger happens, Ackman would be the chairman and chief executive of Howard Hughes Holdings. But his intention is to keep HHH CEO David O’Reilly’s leadership team at the helm of the real estate subsidiary, Howard Hughes Corporation, and all employees would be retained.
Ackman said he was committed to maintaining HHH’s spot on the New York Stock Exchange and that he intends to hold the stock “forever.” It seems Ackman sees value in “the path” to “excess cash resources,” as he phrased it, that he suspects Howard Hughes is on.
The company did not immediately respond to Fortune’s request for comment.
Clarification, Jan. 13, 2025: This article has been updated to clarify the shares Pershing Square has offered to purchase.
