On January 14th, Panxing Plaza Capital Management proposed to merge a newly established subsidiary with Howard Hughes Holdings Inc., transforming the real estate developer into a “contemporary” version of Berkshire Hathaway. In a letter to investors posted on its website, the company stated that the investment firm run by Bill Ackman is offering Howard Hughes shareholders $85 per share, with the majority to be paid in cash. This is a 38.3% premium to Howard Hughes’ stock price when Pershing Square expressed potential merger intentions in August. Ackman has been preparing for the acquisition of Howard Hughes for several months. In August, he said he was working with Jefferies Financial Group Inc. to potentially acquire all of Howard Hughes’ shares that Pershing Square did not yet own. The investment company’s fund holds 37.6% of Howard Hughes’ shares. This transaction will give Ackman the opportunity to expand Howard Hughes, known for investing in master planned communities and retail properties. He stated that he will encourage the company to invest its cash in operating companies, following Buffett’s investment model at Berkshire Hathaway. Howard Hughes’ stock price surged 9.5% to $78.62 due to this news.
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