Pershing Square to Invest $900 million to Acquire Nine Million Newly Issued Shares of Howard Hughes Holdings and Transform HHH Into a Diversified Holding Company

Pershing Square to Support HHH's Strategic Expansion Through Investment, Advisory, and Other Resources

HHH Will Operate as a Diversified Holding Company Seeking to Acquire Controlling Interests in High-Quality, Durable Growth Public and Private Companies

Howard Hughes Corporation, HHH's Real Estate Development Business and Principal Subsidiary, Will Continue as the Nation's Leading Community Builder

Pershing Square's Primary Purchase of HHH Stock for $100.00 per Share Represents a 48% Premium to Friday's Closing Price

Pershing Square Will Now Own 46.9% of the Company

Pershing Square's Investment Materially Improves Howard Hughes' Credit Profile and Strategic and Financial Flexibility

THE WOODLANDS, Texas and NEW YORK, May 05, 2025 (GLOBE NEWSWIRE) -- Howard Hughes Holdings Inc. $(HHH)$ (the "Company," "Howard Hughes" or "HHH") and Pershing Square Holdco, L.P. and its wholly owned subsidiary, Pershing Square Capital Management, L.P. (collectively, "Holdco" or "Pershing Square"), today announced an agreement pursuant to which Pershing Square will today invest $900 million to acquire 9,000,000 newly issued shares of HHH. Pershing Square's investment will enable HHH to become a diversified holding company by acquiring controlling stakes in high-quality, durable growth public and private operating companies while continuing to invest in and grow the Company's core real estate development and Master Planned Communities business.

Pershing Square's acquisition of $900 million of newly issued shares of HHH common stock for $100.00 per share represents a premium of 48% to HHH's closing share price on Friday, May 2, 2025. Pershing Square will now own 46.9% of HHH shares outstanding. Pershing Square has generally agreed to limit its voting power to 40% and its beneficial ownership to 47%.

Pershing Square's Chairman and Chief Executive Officer, Bill Ackman, has been named the Executive Chairman of the HHH Board of Directors. Ryan Israel, Pershing Square's Chief Investment Officer, will become HHH's Chief Investment Officer, a new senior leadership role at the Company. The HHH leadership team, led by CEO David O'Reilly, will remain unchanged with expanded roles and responsibilities. HHH's other employees will remain unchanged.

As part of the transaction, the entire Pershing Square organization will now be available to HHH to support the Company's transformation by providing investment, advisory, and other ancillary services, including corporate development, transaction execution, and capital markets assistance. Pershing Square will also assist HHH in identifying and hedging macro-related risks.

Pershing Square Holdco is owned 90% by Pershing Square principals and 10% by strategic investors. Holdco's $900 million investment represents a 'look-through' cash investment by Pershing Square principals of $810 million. When combined with the Pershing Square funds' existing ownership, this represents a total look-through investment in HHH of $1.2 billion by Pershing Square's principals.

HHH will pay Pershing Square a quarterly base fee of $3.75 million and a quarterly management fee equal to 0.375% of the increase in HHH's equity market capitalization above the Reference Market Cap of the Company. The Reference Market Cap is determined by multiplying the post-transaction share count of 59,393,938 (the "Reference Share Count") by the Reference Market Price of $66.1453, which is adjusted annually for inflation, subject to equitable adjustment for stock splits, reclassifications or similar capital changes. The Reference Share Count does not change in the event the Company issues additional shares to raise equity, to acquire a company for stock, or to provide equity compensation to employees. As a result, the management fee will not increase due to share issuances. It will only increase if the Company's share price compounds at a rate in excess of inflation.

HHH will not pay any additional fees, cash compensation, or equity incentives to Pershing Square or its principals or employees.

"This transaction is the result of a rigorous process overseen by HHH's Special Committee, which included evaluation of each of Pershing Square's proposals, feedback from HHH stockholders and robust negotiations with Pershing Square's principals to reach a mutually favorable outcome," said Scot Sellers, Chairman of the Special Committee. Mr. Sellers continued, "We believe this agreement not only reflects the value that HHH has created in recent years, but it also positions the Company to transform its strategy, with enhanced value creation opportunities and upside potential, while improving its credit profile. With Bill's and Ryan's long-term track record of investment success, along with the expertise and support of the entire Pershing Square team, HHH will seek to acquire controlling interests in high-quality, cash-flow-generative public and private companies for the benefit of all HHH stockholders. We are confident the Company is now even better positioned to deliver long-term, sustainable value for our stockholders."

"I am delighted to return to HHH as its Executive Chairman with the addition of Ryan to assist in transforming the Company to a diversified holding company," said Bill Ackman. "HHH has built substantial value for shareholders in recent years that has largely gone unrecognized due to the high cost of capital that the market assigns to the Company in light of its pure-play exposure to real estate development and community creation. We believe that HHH is a superb platform to build a faster-growing, high-returning holding company that will acquire control of companies that meet Pershing Square's criteria for business quality and durable growth. We are looking forward to working with David and the rest of the HHH team in creating long-term value."

Continued Development of HHC Master Planned Communities

Howard Hughes Corporation ("HHC"), the principal operating subsidiary of HHH, will continue to develop its core Master Planned Communities, Operating Assets and Strategic Developments segments, furthering its commitment to becoming the premier residential and commercial real estate developer.

David O'Reilly, CEO of HHH, said "HHC's award-winning assets, consistently outstanding operations and cash generation potential will serve as the foundation of a tremendous new value creation strategy. Pershing Square's investment will create new avenues for growth, while our core business as the nation's leading community builder will not change. We remain steadfast in our commitment to creating exceptional communities, pursuing innovative development opportunities and acting nimbly to meet market demand and deliver sustainable growth. As we seamlessly expand our priorities, we welcome Bill and Ryan, and the support and resources of Pershing Square."

Governance & Transaction Details

The transaction was negotiated and unanimously approved by the Special Committee of HHH composed entirely of independent and disinterested directors. Upon recommendation of the Special Committee, the Howard Hughes Board of Directors approved the transaction, which closed today.

Going forward, the Howard Hughes Board of Directors will consist of a majority of independent directors, with Pershing Square having the right to nominate three directors so long as it continues to beneficially own at least 17.5% of the fully diluted HHH shares. The Board now includes David Eun, Beth Kaplan, David O'Reilly, Scot Sellers, Steven Shepsman, Mary Ann Tighe, Anthony Williams, Pershing Square's Bill Ackman, Ben Hakim and Ryan Israel, and Jean-Baptiste Wautier as a new director. Mr. Wautier brings substantial experience that will support the Board's oversight of HHH's expanded strategy, including a 20-year career at BC Partners, a Paris-based private equity firm and investment platform that grew its AUM from $8 billion to $45 billion during his tenure as a member of the firm's leadership including a 10-year tenure as its Chief Investment Officer.

Additional details regarding the transaction agreements will shortly be filed with the U.S. Securities and Exchange Commission.

Advisors

Morgan Stanley & Co. LLC is acting as exclusive financial advisor to the Special Committee, and Hogan Lovells US LLP and Richards, Layton & Finger, P.A. are acting as legal counsel. Morgan, Lewis & Bockius LLP is acting as legal counsel to the Company. Jefferies LLC is acting as financial advisor to Pershing Square, and Sullivan & Cromwell LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as legal counsel.

About Ryan Israel

Mr. Israel has served as the Chief Investment Officer of PSCM since August 2022 and as a member of the board of directors of Pershing Square since June 2024. Mr. Israel joined the PSCM investment team in 2009. Mr. Israel was previously an analyst at The Goldman Sachs Group, Inc. in the Technology, Media and Telecom group. Mr. Israel served as a director of Element Solutions Inc. from October 2013 through January 2019. Mr. Israel received his Bachelor of Science from the Wharton School at the University of Pennsylvania, where he graduated summa cum laude and beta gamma sigma in 2007.

About Jean-Baptiste Wautier

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May 05, 2025 07:00 ET (11:00 GMT)