Bill Ackman, the influential head of Pershing Square, has increased his offer to take over Howard Hughes Holdings in a bold move that mirrors the career trajectory of Warren Buffett, famously known as the "Oracle of Omaha." Following the announcement, Howard Hughes’ shares dropped nearly 5% in extended trading, despite an earlier surge of 6.8%, closing at $80.60 in anticipation of Ackman's proposal. The seasoned investor seeks to emulate Buffett's path by transforming Howard Hughes into a diversified holding company akin to the $1 trillion conglomerate, Berkshire Hathaway.
Ackman's revised proposal includes acquiring 10 million newly issued shares of Howard Hughes at $90 each, up from a previous offer of $85 per share made in January. Should the deal proceed, it will grant Pershing Square a 48% stake in the real estate developer headquartered in The Woodlands, Texas. Ackman is poised to assume the roles of chairman and CEO if his takeover bid is successful.
The inspiration behind Ackman's strategic move stems from Buffett's journey from an activist investor and hedge fund manager to the helm of Berkshire Hathaway. In the 1960s, Buffett closed his partnerships to take control of Berkshire Hathaway, which has since grown into a behemoth with interests across industries such as insurance, energy, railroads, and retail. The company also boasts a substantial equity portfolio and over $300 billion in cash reserves.
Ackman envisions continuing Howard Hughes' legacy of developing and owning master-planned communities (MPCs), including notable projects like The Woodlands in Houston and Summerlin in Las Vegas. He expressed optimism about the long-term prospects of these ventures, noting their potential to evolve into significant urban centers in pro-business markets across the United States.
"Owning small and growing MPCs that will eventually become large cities in the best pro-business markets in the country is a great long-term business," Bill Ackman stated.
Ackman's ambition extends beyond simply acquiring shares; he aims to leverage Pershing Square's extensive resources to reshape Howard Hughes Holdings into a diversified powerhouse.
"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 declared.