Bill Ackman offers $1 billion for real estate giant Howard Hughes to emulate Berkshire Hathaway
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According to the New York Post. According to the New York Post, creating a “modern-day Berkshire Hathaway” is no mean feat, but that’s exactly what the billionaire investor and hedge fund manager Bill Ackman intends to do. The CEO of Pershing Square plans to increase his stake in real estate firm Howard Hughes Holdings and take the company private.
Ackman said in a letter to investors that Pershing currently holds a 37.6% stake in HHH and plans to offer $85 per share to buy the rest of the company.
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“With apologies to Mr. To Buffet, HHH would become modern Berkshire Hathaway who would acquire a controlling stake in the operating companies,” wrote Ackman, 58, who has a net worth of $9.2 billion.
After the news, Howard Hughes shares rose 9.5% to $78.62. Ackman has been involved with the real estate company for a decade and only stepped down from the board in April after serving as chairman since 2010.
“We, like other longtime shareholders and this board, have been dissatisfied with the performance of the company’s stock price,” Ackman said in the letter, according to Reuters. When the deal closes, it would increase Pershing Square’s stake in Howard Hughes to somewhere between 61% and 69%, depending on how many investors agree to be bought out of the 38% it currently holds.
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Howard Hughes was an arm of the real estate investment trust General Growth Properties, which formed its own entity in 2010. It owns and manages various types of real estate in the US, including commercial, residential and mixed-use. Its market value is 3.6 billion dollars.
Ackman founded Pershing Square in 2004. One of his most notable moves was the rescue of mall operator General Growth Properties, from which he became involved in Howard Hughes. According to Forbes, Pershing Square’s stock portfolio is concentrated in seven companies, including Chipotle, Hilton and Alphabet, the parent company of Google, in which it has invested over 20% of the shares, writes The Motley Fool. Ackman is well-known among other fund managers for his large social media following with more than a million followers on Xu.
