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Bill Ackman’s Pershing Square is weighing up a deal to delist $3bn real estate company Howard Hughes Holdings, according to a regulatory filing, in what would be a significant escalation of its investment in the group.
Pershing Square is the real estate company’s largest shareholder, with a holding of about 38 per cent. Pershing has tapped investment bank Jefferies to evaluate taking the company private and may sound out co-investors to help finance a deal, the regulatory filing on Tuesday showed.
The proposed deal comes as Ackman’s hedge fund wrestles with a series of bruising setbacks. Last week he pulled the initial public offering of Pershing’s US entity Pershing Square USA after slashing its fundraising target from $25bn to $2bn.
Pershing Square declined to comment. Jefferies did not respond to a request for comment. A spokesperson for Howard Hughes said the company does not comment on the actions or intentions of individual shareholders and that all details known to the company were in the regulatory filing. Its shares rose 6.3 per cent on Wednesday in New York.
Pershing Square has been a longtime shareholder of Howard Hughes, which owns land and develops office buildings, apartment buildings and master-planned communities across Texas, Nevada, Arizona, Hawaii and Maryland. The company played a big role in redeveloping South Street Seaport in New York.
Ackman left the board of Howard Hughes this spring, after serving as chair since it was spun out from then-bankrupt shopping mall operator General Growth Properties in 2010.
At the time of the spin-off “it was a complicated collection of development assets, master planned communities, income-producing properties, and other assets”, Ackman said in April, when Howard Hughes announced he would leave its board of directors.
Pershing Square has slowly increased its stake over time and “intends to remain a major, long-term shareholder of HHH”, the company said in a press release in April.
Since then, Howard Hughes has streamlined its business. In July it split off its entertainment division, which includes parts of the South Street Seaport neighbourhood, the Las Vegas Aviators minor league baseball team and stadium, and rights for the space above Las Vegas’s fashion show mall, where it plans to build a casino.
Referring to the failed IPO of Pershing Square USA and future plans, Ackman said in a post on social media platform X: “I made the decision to withdraw the IPO this morning when I came up with a better transaction structure.” The company has not yet provided additional details on what that new potential transaction may be.
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