Pershing Square revises bid to up stake in Howard Hughes

(Sharecast News) - Bill Ackman's Pershing Square Capital Management revised its offer to increase its stake in Howard Hughes, it emerged on Wednesday, proposing a $900 million deal to acquire 10 million newly issued shares at $90 per share. The move would raise Pershing's ownership from 37.6% to 48%, replacing a prior $1bn proposal that aimed for a controlling stake.

Under the plan, Ackman would assume the roles of chairman and chief executive officer of Howard Hughes, while current CEO David O'Reilly would lead its main operating subsidiary, Howard Hughes Corporation.

The real estate company's board said its special committee would evaluate the proposal.

Pershing Square would not receive equity or other compensation as part of the deal, but Howard Hughes would be required to pay a 1.5% annual fee based on its market capitalisation, which currently stands at around $3.8bn.

Pershing said it intended to fund the transaction with cash on hand, adding that it did not require regulatory approvals, shareholder consent, or additional financing, allowing for a swift closing.

Ackman framed the proposal as an effort to transform Howard Hughes into a diversified holding company, drawing comparisons to Berkshire Hathaway.

He noted that Howard Hughes' real estate assets, including large-scale master-planned communities such as the Woodlands in Texas and Summerlin in Nevada, provided a strong foundation for expansion.

Reporting by Josh White for Sharecast.com.