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11h ago

Bill Ackman’s Pershing Square Finalizes $900M Stake Expansion in Howard Hughes

The deal raises Pershing Square's stake to 46.9%, introduces governance reforms, and positions Howard Hughes for transformation into a diversified holding company.

Howard Hughes CEO David O'Reilly will retain his position and have expanded responsibilities after the deal with Bill Ackman's Pershing Square.
Bill Ackman, chief executive officer and portfolio manager at Pershing Square Capital Management, speaks during the SALT conference in Las Vegas, Nevada, U.S. May 18, 2017. REUTERS/Richard Brian/File Photo

Overview

  • Pershing Square has invested $900 million in Howard Hughes, purchasing 9 million newly issued shares at a 48% premium, raising its stake to 46.9%.
  • Bill Ackman will serve as executive chairman of Howard Hughes’ board, with Pershing Square CIO Ryan Israel assuming the role of chief investment officer at the company.
  • The agreement includes governance measures, such as a 40% cap on Pershing Square's voting power, to maintain balanced oversight.
  • Howard Hughes will pay Pershing Square a $3.75 million quarterly base fee and a management fee tied to changes in its market capitalization.
  • Ackman aims to transform Howard Hughes into a diversified conglomerate modeled after Berkshire Hathaway, with shares rising 8% following the announcement.