Bill Ackman Ups Howard Hughes Holdings Bid With $900M Investment

Bill Ackman’s Pershing Square Capital Management has revised its plans to merge with commercial real estate giant Howard Hughes Holdings (HHH).

After putting forward a $1.5 billion deal to take over a majority stake of HHH last month, Ackman’s latest offer would raise the price per share and see Pershing Square acquire 10 million newly issued HHH shares for $90 apiece, according to a Tuesday announcement.

Pershing Square said the $900 million investment in its revised offer would “enable HHH to immediately begin to pursue the acquisition of controlling interests in public and private companies as part of its new strategy of becoming a diversified holding company.”

In a Tuesday announcement, HHH confirmed its board’s receipt of the revised plan and said its special committee met with Pershing Square officials last week to discuss the offer.

HHH also said its special committee has not yet engaged in any negotiations with Pershing Square regarding its proposals and has not yet made a decision.

Pershing Square declined further comment, while a spokesperson for HHH did not immediately respond to a request for further comment. Bloomberg first reported the news.

Also under the new bid, Pershing Square’s ownership of HHH would increase from 37.6 percent to 48 percent of shares outstanding, while Ackman would become chairman and CEO of HHH and would bring with him two other Pershing Square leaders. Ryan Israel would become chief investment officer, and Ben Hakim would become president, according to the announcement.

Meanwhile, HHH’s principal subsidiary, Howard Hughes Corporation, would continue to be led by CEO David O’Reilly, Pershing Square said.

Ackman’s original proposal in January was for Pershing Square to purchase 11.7 million shares of HHH at $85 per share in a deal valued at $1 billion, with an additional $500 million share repurchase program funded through new bond issuances, as Commercial Observer previously reported. The latest proposal has replaced that offer and does not mention any share repurchase.

Howard Hughes Corporation specializes in developing master-planned communities and currently holds seven communities across five U.S. states with nearly 6,000 units of housing, as well as 6.9 million square feet of office space and 2.9 million square feet of retail space, CO reported.

Ackman started making moves to take over HHH in August with the plan to take the company private. Meanwhile, Howard Hughes spun off HHH and Seaport Entertainment into two separate entities in July, with HHH focused on building master-planned communities and Seaport handling the company’s hospitality projects.

Isabelle Durso can be reached at idurso@commercialobserver.com.