Contrarian Corpus
activist full deck follow up
2025-02-18 · 55 pages

Howard Hughes Holdings Inc. HHH

N 4 Narrative
V 3 Visual
C 2 Craft
Original source ↗

The three reasons

  1. 1

    HHH stuck at ~40% NAV discount with no take-private bidder after 284 investors approached

  2. 2

    $900M primary issuance at 46.4% premium is accretive and unlocks a credit-positive cash war chest

  3. 3

    Pershing-led HHH becomes a 'modern-day Berkshire Hathaway' with 21-year 935 bps S&P outperformance

Primary demands

  • Approve Pershing Square HoldCo's $900 million primary investment in HHH at $90/share
  • Increase Pershing Square ownership from 37.6% to 48.0% without a change of control
  • Enter into evergreen Services Agreement with Pershing Square at 1.5% of equity market cap, no performance fees
  • Install Bill Ackman as Chairman & CEO and transform HHH into a diversified holding company
  • Maintain NYSE listing and majority-independent Board with 31.3M public float

KPIs cited

Primary issuance premium
$90 represents 46.4% premium to $61.46 unaffected price (8/5/2024)
Pershing Square ownership
Increases from 37.6% to 48.0% post-transaction
Pershing Square 21-year net return
16.4% annualized vs S&P 10.5% — 935 bps per annum outperformance since 2004
Permanent capital era net return
24.0% annualized since 2018 vs S&P 14.0% — 1,300 bps outperformance
HHH historical discount to Investor Day NAV
~40% (37%, 39%, 39%, 24% across April 2021, April 2022, September 2023, November 2024)
Take-private process result
Jefferies approached 284 investors, 40 signed NDAs, 20 met, 0 formal indications of interest
Hedging multiple of capital
17.5x in GFC, 93.4x in COVID-19 CDS, 11.3x and 6.5x on rate swaptions
All-in advisory fee ratio
1.5% of equity market cap (~1.2% of total cap) — 50-120 bps below Brookfield BIP/BEP/BBU
Required excess return hurdle
Board must judge whether transaction delivers at least 150 bps of annual excess equity return
Bill Ackman look-through stake
8.5M shares ($764M at $90) post-transaction; full Pershing team owns 14.3M shares (23.7%)

Pattern membership

Where this document fits across the library's 12 rhetorical / structural patterns.

Notable slides (10)

Notes

Filed as exhibit to Schedule 13D Amendment No. 23. Unusual posture: this is a 'discussion materials' deck for HHH's Special Committee — Pershing is already a 37.6% insider proposing a self-dealing transaction, so tone is collaborative/explanatory rather than adversarial. Argues affirmatively against sum-of-parts/breakup (would 'undermine MPC strategy and incur tax friction'). Frames the ask as two simple Board questions and closes with explicit 150 bps excess return hurdle. The 'modern-day Berkshire Hathaway' framing on p52 is the central narrative anchor. Heavy use of fee-comp benchmarking against Brookfield listed entities (BIP/BEP/BBU), traditional PE, non-traded REITs (BREIT/SREIT/KREST), and non-traded PE (K-PRIME/BXPE) to defend the 1.5% advisory fee. Pages 3, 15, 33, 45, 53 are section dividers; pages 54-55 are disclaimers.