Howard Hughes Holdings (HHH, Financial) just got a serious boost, jumping nearly 11% to $79.59 this morning, thanks to Bill Ackman (Trades, Portfolio)'s bold new move. Ackman's Pershing Square Capital Management wants to scoop up the shares it doesn't already own—for $85 each. That's a hefty 38% premium over the stock's recent average price and 18.4% higher than last Friday's close. The kicker? Shareholders get to pick: cash at $85 per share or roll some of it into the new company, with Howard Hughes staying intact post-deal. Pershing's current stake in HHH stands at 37.6%, and this buyout could solidify its grip while adding new flexibility for shareholders.
Here's the backstory: Ackman's been in Howard Hughes' corner since 2010, but he's frustrated. Despite the company's solid business progress, the stock has been, well, underwhelming—averaging a modest 2.2% annual return over 14 years. This deal aims to change that narrative. Pershing plans to pour $1 billion into buying 11.8 million shares and kick off a $500 million share repurchase program, all at that sweet $85-per-share price point. Ackman isn't just dabbling here; he's in for the long haul. His words? “We intend to hold HHH stock forever.”
What's next? If this deal goes through, HHH will evolve into a powerhouse diversified holding company, leveraging Pershing Square's expertise to diversify beyond real estate and mitigate risks like interest rate hikes and market volatility. Howard Hughes' leadership, led by CEO David O'Reilly, stays steady at the helm, ensuring the company's mission and team remain untouched. Investors are now waiting for the board's green light—and this could be a defining moment for Howard Hughes. Buckle up.
