Bill Ackman Raises Howard Hughes Offer to $90 a Share—Here's How He Plans to Build a $1 Trillion Empire

Billionaire investor Bill Ackman is making a big move with his firm, Pershing Square Capital Management, as he looks to expand his stake in Howard Hughes Holdings HHH. On Feb. 18, he proposed buying 10 million newly issued shares at $90 each, a deal worth $900 million. 

According to The Wall Street Journal  this would push Pershing Square's ownership from 37.6% to 48%. Ackman has made it clear that he wants to turn Howard Hughes into something much bigger, calling it a "modern-day Berkshire Hathaway BRK BRK.B))."

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Ackman's Plan to Reshape Howard Hughes

If the deal goes through, Ackman would take over as chairman and CEO of Howard Hughes, with Pershing Square's Ryan Israel stepping in as chief investment officer and Ben Hakim as president. 

Pershing Square said its plan is to use its financial resources to take controlling stakes in both private and public companies that fit its investment model.

Ackman has pointed to Warren Buffett's transformation of Berkshire Hathaway in the 1960s as a blueprint. Buffett took a struggling textile company and turned it into one of the most successful conglomerates in history, with holdings in insurance, energy, retail, and more. 

"We will make available the full resources of Pershing Square to HHH to build a diversified holding company, or one could say, a modern-day Berkshire Hathaway," Ackman posted on X. This strategy aligns with Pershing Square's approach of focusing on businesses with strong fundamentals and long-term growth potential.

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The offer represents a 46.4% premium over Howard Hughes' stock price of $61.46 on Aug. 5, 2024. However, some analysts believe the offer still falls short, estimating the company's net asset value at closer to $118 per share, according to media reports. 

Investors reacted quickly. Howard Hughes' stock climbed 6.8% on Feb 18, closing at $80.60 in anticipation of the announcement. 

A key part of the agreement would give Pershing Square an annual fee of 1.5% of Howard Hughes' equity market capitalization, paid quarterly. With the company valued at around $3.8 billion, this would translate to about $56 million per year, according to the Houston Chronicle. 

Ackman's history with Howard Hughes goes back years—he was chairman from 2010 until stepping down in April 2024. Now, his renewed interest suggests he sees untapped potential. 

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