Billionaire Bill Ackman’s Bold Move: Pershing Square Aims to Transform Howard Hughes into a ‘Modern-Day Berkshire Hathaway’

In a significant move that sent ripples through the real estate and investment sectors, billionaire investor Bill Ackman’s Pershing Square Capital Management announced on Monday a substantial proposal to acquire the remaining stake in Howard Hughes Holdings (HHH), offering $85 per share. The ambitious deal aims to increase Pershing Square’s ownership from its current 38% to between 61% and 69%, depending on shareholder participation.

The announcement triggered an immediate positive market response, with Howard Hughes shares surging 13% to $78.25 in pre-market trading. The deal structure includes a $1 billion investment from Pershing Square, complemented by Howard Hughes’ planned $500 million share buyback initiative.

Ackman’s vision for Howard Hughes extends beyond mere ownership consolidation. In his letter to the company’s board, he outlined plans to transform the real estate developer into what he describes as a “modern-day Berkshire Hathaway,” positioning it to acquire controlling interests in operating companies. This strategic pivot could mark a significant evolution for Howard Hughes, which currently focuses on owning and managing commercial, residential, and mixed-use properties across the United States.

The proposed transaction offers existing shareholders flexibility in their exit strategy. Investors can choose between receiving full payment in cash or rolling over their shares into the post-merger entity. This structure allows long-term believers in Ackman’s vision to maintain their investment while providing an exit opportunity for others at a premium.

Despite Howard Hughes’ substantial business progress over its 14-year history as a public company, Ackman expressed dissatisfaction with its stock price performance. The company, which was originally spun off from General Growth Properties, has maintained a significant presence in the real estate sector, with a current market capitalization of approximately $3.6 billion.

The timing of this proposal comes after Ackman’s long history with Howard Hughes, having served as its chairman from 2010 until his resignation from the board in April. Under the proposed agreement, a Pershing Square unit will purchase shares at $85 each from non-affiliated shareholders, while Howard Hughes simultaneously conducts its share repurchase program.

As of the announcement, Howard Hughes Holdings has not yet provided an official response to the proposal. The deal’s success will largely depend on shareholder reception and regulatory approvals, with the potential to reshape both companies’ futures significantly.

This strategic move by Ackman comes at a time when the broader market faces uncertainty. The timing could be seen as opportunistic, given recent market volatility and the real estate sector’s challenges. The transformation of Howard Hughes into a diversified holding company could provide new growth avenues and potentially unlock significant shareholder value.

The proposed merger represents one of the most significant deals in the real estate sector for 2025, potentially creating a new powerhouse in the investment landscape. If successful, it would mark a major milestone in Ackman’s investment career and potentially create a new model for real estate development companies seeking to diversify their operations and revenue streams.