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According to the New York Post. Creating a "modern-day Berkshire Hathaway" will be no easy task, but that's exactly what billionaire investor and hedge fund manager Bill Ackman plans to do, the New York Post reports. The CEO of Pershing Square plans to increase his stake in real estate company Howard Hughes Holdings and take the company private.
Ackman said in a letter to investors that Pershing currently owns 37.6% of HHH and plans to offer $85 per share for the rest of the company.
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"With apologies to Mr. Buffett, HHH will become a modern-day Berkshire Hathaway, acquiring controlling interests in operating companies," wrote Ackman, 58, with a net worth of $9.2 billion.
Howard Hughes shares rose 9.5% to $78.62 after the news broke. Ackman has been involved with the real estate company for a decade, serving as chairman since 2010 before stepping down from the board in April.
According to Reuters, Ackman said in the letter: "We share other long-term shareholders and the board of directors who are dissatisfied with the performance of the company's stock price." After the transaction is completed, Pershing Square's shareholding in Howard Hughes will increase. to 61% to 69%, depending on how many investors agree to be acquired from their current 38% holdings.
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Howard Hughes, a division of real estate investment trust General Growth Properties, formed its own entity in 2010. It owns and manages various types of U.S. real estate, including commercial, residential and mixed-use properties. It has a market capitalization of $3.6 billion.
Ackman founded Pershing Square in 2004. One of his most high-profile moves was the rescue of General Growth Properties, the mall operator that led to his foray into Howard Hughes. According to Forbes, Pershing Square's stock portfolio is concentrated in seven companies, including Chipotle, Hilton and Google parent Alphabet, in which he has invested more than 20% of the stock, according to the Motley Fool. Ackman is well-known among other fund managers because of his large social media following of over 1 million followers on X.
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Ackman has always been optimistic about Google parent company Alphabet. When Bard, Google's ChatGPT solution, failed and its stock price fell, Ackman began buying shares aggressively. As of June 30, 2024, his Pershing Square hedge fund held Class A and Class C shares of the tech giant, worth about $2.1 billion. It was a prescient move. In the second quarter of 2024, Google Cloud revenue increased by 29% to $10.3 billion. Its operating income nearly tripled year over year to $1.17 billion. Alphabet CEO Sundar Pichai said on the second-quarter earnings call that the company's generative AI solutions "have generated billions of dollars in revenue and been used by more than 2 million developers." use".
Ackman is once again carefully following in Warren Buffett's footsteps by following Berkshire Hathaway's acquisition of Howard Hughes Corporation. Focusing more on the company's enduring competitive advantages rather than short-term setbacks is a classic move by Berkshire Hathaway. Ackman is open to sticking with Buffett's strategy. "I've always been a follower of Warren Buffett," he told CNBC in 2023. "He's been my unofficial mentor for many years."
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This article Bill Ackman bids $1 billion for real estate giant Howard Hughes to emulate Berkshire Hathaway originally appeared on Benzinga.com
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