6th May 2025 09:50
(Alliance News) - Pershing Square Holdings Ltd on Tuesday announced a USD900 million investment in Howard Hughes Holdings Inc, acquiring nine million newly issued shares at USD100 each - a 48% premium to the Texas-based real estate firm's Friday closing price.
The investment trust said the deal, which brings Pershing Square's ownership to 46.9% of outstanding shares, is intended to help transform HHH into a diversified holding company, with ambitions to acquire controlling stakes in durable-growth public and private firms while continuing its real estate operations.
Pershing Square, which focuses on acquiring and holding significant positions in large capitalisation companies, has agreed to cap its voting power at 40% and its beneficial ownership at 47%.
Bill Ackman, the founder & chief executive officer of Pershing Square, has been appointed as the executive chair of HHH's board. Pershing Square's Chief Investment Officer Ryan Israel will join as HHH in the newly created role of chief investment officer.
The current management team, led by CEO David O'Reilly, will remain in place.
Ackman said the partnership will allow HHH to tap into Pershing Square's investment, advisory and capital markets expertise, adding: "We believe that HHH is a superb platform to build a faster-growing, high-returning holding company."
Pershing Square's investment materially strengthens HHH's credit profile and strategic flexibility, according to both parties. In return, the firm will receive a base quarterly fee of USD3.8 million, plus a performance-based management fee tied to increases in HHH's equity market cap above a set reference point.
The deal was unanimously approved by HHH's special committee of independent directors. Going forward, Pershing Square will be entitled to nominate three directors as long as it holds at least 17.5% of fully diluted shares.
Shares in Howard Hughes Holdings were up 0.1% at USD69.50 during premarket trading in New York on Monday. Shares in Pershing Square were up 0.2% at 3,639.76 pence in London on Monday morning.
By Eva Castanedo, Alliance News reporter
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