Hedge-fund tycoon reaches $900M deal with Summerlin’s developer
Hedge-fund magnate Bill Ackman is boosting his ownership stake in Summerlin developer Howard Hughes Holdings and widening its scope of operations.
Hughes Holdings on Monday announced an agreement with Ackman’s Pershing Square Capital Management that calls for his New York- based investment firm to acquire 9 million newly issued shares in the developer for $900 million.
The deal will enable Texas-based Hughes Holdings to become a diversified holding company by acquiring controlling stakes in operating companies — a shift proposed by Ackman — while still growing its core development and master-planned communities business, according to a news release.
Ackman, the billionaire former chairman of the company, has been named executive chairman of Hughes Holdings, and his firm will now own 46.9 percent of the developer’s stock.
As of early this year, Pershing Square owned 37.6 percent of Hughes Holdings’ stock.
Transaction offers
Ackman has cited an “extremely disappointing” stock-price performance and said he envisions the developer becoming similar to billionaire Warren Buffett’s famed conglomerate Berkshire Hathaway.
“Fortunately, our starting base of assets won’t be a dying textile company, but a very good business,” Ackman previously wrote on X, alluding to Berkshire’s history.
Pershing Square initially offered in January to buy out other stockholders in Hughes Holdings at $85 per share for $1 billion total, a deal that would have given the firm a majority of the developer’s stock.
It then withdrew the proposal and submitted a revised offer in February to acquire 10 million newly issued shares in Hughes Holdings for $90 apiece, or $900 million total.
That deal also called for Ackman to become chairman and chief executive of the company.
Hughes Holdings rejected the offer but said it entered a standstill agreement with Pershing Square to “facilitate further discussions to explore potential alternatives.”
As announced Monday, Pershing Square is buying the stock for $100 per share, and Hughes Holdings’ leadership team, led by CEO David O’Reilly, will “remain unchanged with expanded roles and responsibilities.”
The developer said its other employees will remain unchanged as well.
Las Vegas links
Hughes Holdings has projects and properties in Texas, Arizona, Hawaii, Maryland and Nevada.
Spanning 22,500 acres along the Las Vegas Valley’s western rim, Summerlin boasts 130,000 residents and some of the highest home prices in Southern Nevada, as well as parks, trails and community centers.
Hughes Holdings sells land in Summerlin to homebuilders and has developed hundreds of millions of dollars’ worth of projects in the heart of Las Vegas’ biggest master-planned community.
Its namesake Howard Hughes, the famed aviator, business tycoon and recluse, acquired the land mass in the 1950s.
Hughes Holdings’ stock rose 2.86 percent Monday on news of the Ackman deal, closing at $69.40, while the stock market overall ticked lower.
On Monday, the S&P 500 tumbled 0.64 percent, the Dow Jones Industrial Average slid 0.24 percent and the Nasdaq fell 0.74 percent.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.
