By Billionaire hedge fund manager Bill Ackman is not giving up on plans of taking over Howard Hughes Holdings Inc (NYSE: HHH) to create a “modern-day Berkshire Hathaway”.
On Wednesday, his investment management firm, Pershing Square, proposed to buy 10 million newly issued shares of HHH at $90 apiece.
Ackman had previously offered to merge Howard Hughes with a subsidiary of Pershing Square for $85 per share. HHH is going for $77 and change at writing.
Pershing Square could own nearly half of Howard Hughes
If Howard Hughes accepts Ackman’s new proposal, Pershing Square’s stake in the real estate development company will increase to about 48%.
“We’ll 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,” the hedge fund manager wrote on X today.
Under Ackman’s lead, the new Howard Hughes will build controlling stakes in both private and public companies, much like Berkshire Hathaway.
Note that the billionaire’s new proposal may require a few weeks only to complete, given that it’s not subject to regulatory or shareholder approvals.
New HHH may be similar to Berkshire Hathaway
Bill Ackman likened his vision for Howard Hughes with Berkshire Hathaway, as the latter was a struggling textile business that the legendary “Oracle of Omaha” took over in 1965.
Buffett then tapped on energy, insurance, retail, railroad and other businesses to turn it into a conglomerate that’s now worth $1.0 trillion.
Today, Berkshire Hathaway has over $300 billion in cash on top of a huge equity portfolio as well.
The conglomerate is scheduled to report its Q4 earnings on February 28th. Consensus is for it to earn $4.43 a share this quarter versus $3.92 per share a year ago.
Ahead of the quarterly results, Berkshire Hathaway’s Class B shares are up roughly 9.0% versus their year-to-date low.
Bill Ackman sees potential in owning MPCs
On Wednesday, Bill Ackman also confirmed that HHH, under his leadership, will continue to develop master planned communities (MPCs) as it has for years.
“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,” he argued in his tweet.
All in all, the billionaire hedge fund manager went on to call owning Howard Hughes much better than owning a struggling textile company.
In November, the real estate developer reported $1.95 a share of net income from continuing operations for its third financial quarter. The number was up sharply from 64 cents per share a year ago.
Wall Street currently has a consensus “buy” rating on HHH shares and sees upside in them to $91 on average that indicates potential for a well over 15% gain from current levels.
The post Bill Ackman reveals plans of creating ‘modern-day Berkshire Hathaway’ appeared first on Invezz
