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Howard Hughes Confirms Receipt of Unsolicited Acquisition Proposal from Pershing Square

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No Stockholder Action Required at this Time

THE WOODLANDS, Texas, Jan. 13, 2025 (GLOBE NEWSWIRE) -- Howard Hughes Holdings Inc. (NYSE: HHH) (the “Company” or “HHH”) today confirmed the Board’s receipt of a proposal from Pershing Square Capital Management LP (“Pershing Square”) under which Pershing Square has proposed to acquire additional shares of the Company’s common stock in a merger transaction between the Company and a newly formed merger subsidiary of Pershing Square Holdco, L.P., pursuant to which Pershing Square would own a majority of the Company’s common stock as a result of such merger. Pershing Square currently beneficially owns approximately 37.6% of the Company's common stock.

As previously announced on August 8, 2024, the Howard Hughes Board of Directors formed a Special Committee, comprised of independent directors, in response to interest expressed by Pershing Square in exploring a possible transaction. The Special Committee will evaluate the proposal and determine the appropriate course of action and process. No action is required by HHH stockholders at this time.

The proposal is conditioned on, among other things, the negotiation and execution of a definitive agreement, as well as approval and recommendation of the proposal by the Special Committee and approval by holders of a majority of the shares of the Company's common stock not owned by Pershing Square or parties affiliated with or advised by Pershing Square.

There can be no assurance that the Company will pursue this proposed transaction or any other strategic outcome, and HHH does not intend to comment further on this matter unless and until further disclosure is determined to be appropriate or necessary.

The proposal letter is included as an exhibit to the Company’s Form 8-K filed on January 13, 2025, available with the U.S. Securities and Exchange Commission.

Morgan Stanley & Co. LLC is acting as financial advisor to the Special Committee, and Hogan Lovells US LLP and Richards, Layton & Finger, P.A. are acting as legal counsel.

About Howard Hughes Holdings Inc.

Howard Hughes Holdings Inc. owns, manages, and develops commercial, residential, and mixed-use real estate throughout the U.S. Its award-winning assets include the country’s preeminent portfolio of master planned communities, as well as operating properties and development opportunities including Downtown Columbia® in Maryland; The Woodlands®, Bridgeland® and The Woodlands Hills® in the Greater Houston, Texas area; Summerlin® in Las Vegas; Ward Village® in Honolulu, Hawaiʻi; and Teravalis™ in the Greater Phoenix, Arizona area. The Howard Hughes portfolio is strategically positioned to meet and accelerate development based on market demand, resulting in one of the strongest real estate platforms in the country. Dedicated to innovative placemaking, the company is recognized for its ongoing commitment to design excellence and to the cultural life of its communities. Howard Hughes Holdings Inc. is traded on the New York Stock Exchange as HHH. For additional information visit www.howardhughes.com.


Pershing Square's Proposal Letter To Howard Hughes

The Board of Directors

Howard Hughes Holdings Inc.

9950 Woodloch Forest Drive, Suite 1100

The Woodlands, Texas 77380

Dear HHH Board,

While we are pleased with the substantial business progress Howard Hughes Holdings (“HHH” or the “Company”) has made over the more than 14 years since it went public, we, like other long-term shareholders and this board, have been displeased with the Company’s stock price performance. For context, in November of 2010, we along with Brookfield, Blackstone, and Fairholme initially capitalized the Company with a $250 million rights offering at $47.62 per share. When we filed our 13D on August 6th of last year, HHH’s closing share price the previous day was $61.46 per share. Including the market value of the Seaport Entertainment spinoff, this $16.62 increase represents a 35% total return over the last 14 years, or a 2.2% compound annual return, and the Company has paid no dividends since its inception.

The Company’s stock price performance is obviously extremely disappointing, particularly in light of the high regard we have for this board and the Company’s superb management team led by David O’Reilly and the nearly one thousand employees who work at Howard Hughes, many of whom I have gotten to know over the last more than decade.

Ultimately, the lack of recognition by the stock market of HHH’s accomplishments led to our decision in August of last year to consider taking the Company private. Since the filing of our Schedule 13D announcing our potential plans, we have received feedback from shareholders who have expressed interest in remaining long-term investors in the Company alongside Pershing Square. This feedback has informed our thinking on a potential transaction for HHH that would accomplish our objective of becoming a larger permanent owner of the Company, while also creating a highly attractive cash alternative for shareholders who choose to exit, and accommodating shareholders who wish to invest alongside us for the long term.

The Transaction

We are therefore hereby proposing a potential merger transaction (the “Transaction”) in which a newly formed merger subsidiary of Pershing Square Holdco, L.P. (“Pershing Square Holdco”, the parent company of the alternative investment manager which employs the entire Pershing Square team and manages our investment funds) would merge (the “Merger”) with and into the Company, with the Company as the surviving corporation in the Merger.

HHH stockholders would have the option of receiving more than a majority of their Merger consideration in cash at $85.00 per share – representing a premium of 38.3% to the unaffected stock price1 and a premium of 18.4% to the closing price this past Friday – and the balance in stock of the post-merger company, the future business plan of which I describe in greater detail below.

Pursuant to the Merger, the Company’s stockholders would benefit from a cash/stock election that would enable them to elect to receive Merger consideration in cash at $85 per share, or to ‘rollover’ all or a portion of their shares into the post-merger company (hereinafter referred to as “HHH” or the “Company” as applicable). The cash/stock election would be subject to proration intended to ensure that the Company maintains a public float of at least 13.6 million shares, or 30.8% of the Company’s then issued and outstanding share capital.

Read the full proposal letter here.