Bill Ackman expects to lead Howard Hughes Holdings after raising his takeover offer for the Texas-based real estate development and management company. But Howard Hughes stock sank below a key level on Wednesday.
Some Wall Street analysts said that the proposed deal still does not create much value for Howard Hughes shareholders and leaves the company publicly traded, according to FactSet.
HHH Stock Tumbles
Late Tuesday, Ackman said in a post on X that Pershing Square has proposed acquiring 10 million newly issued Howard Hughes shares at $90 per share. That would be up from an offer at $85 a share in January. "When combined with the 18.9 million shares that are currently held by the Pershing Square Funds, we will own 48% of the company," Ackman added.
The hedge fund titan had teased the announcement earlier in the day.
Shares of Howard Hughes dived 8.9% in big volume in Wednesday's stock market action, sliding back below the 50-day moving average. On Tuesday, HHH stock had shot up 6.8%, regaining the 50-day line.
The HHH company has a convoluted series of connections, tying back to the Summa Corp. Summa was the holding company formed in 1972 to house the remaining business interests of entrepreneur Howard Hughes following the breakup of the Hughes Tool Company. The Howard Hughes Corp. developed the planned community of Summerlin, NV.
Company filings list assets including "one of the nation's largest portfolios of master planned communities," as well as "entertainment-related assets in New York and Las Vegas, including the Seaport in Lower Manhattan, the Las Vegas Aviators Triple-A Minor League Baseball team."
Bill Ackman Aims For 'Modern-Day Berkshire Hathaway'
If the deal goes through, Ackman would become chairman and CEO of Howard Hughes. He outlined an ambition "to build a diversified holding company, or one could say, a modern-day Berkshire Hathaway."
"The new HHH will acquire controlling interests in private and public companies that meet Pershing Square's criteria for business quality," Ackman's post on X said late Tuesday.
Warren Buffett 'Devotee'
Ackman hinted earlier Tuesday about a transformational deal, likening it to Warren Buffett getting control of Berkshire Hathaway, a struggling textiles company, in 1965.
"Fortunately, our starting base of assets won't be a dying textile company, but a very good business," he said.
Ackman has previously called himself a "devotee" of the 94-year-old Berkshire chief.
Howard Hughes stock has an 87.77 buy point from an 11-week consolidation, MarketSurge shows.
