Howard Hughes Holdings Inc. HHH
HHH trades at a 40% NAV discount with no take-private bidders; Pershing's $900M primary investment at $90 converts it into a modern-day Berkshire Hathaway.
Thesis
Howard Hughes Holdings, owner of premier master-planned communities in Texas, Nevada, Hawaii, Maryland and Arizona, has chronically traded at roughly a 40% discount to its investor-day NAV, burdened by a C-Corp structure, small-cap scale, and macro sensitivity that repel traditional real-estate investors. A 2019 strategic review drew no offers and a four-month 2024 privatization sounding of 284 investors (40 NDAs, 20 meetings) produced zero formal bids. Pershing Square proposes a simplified alternative: a $900 million primary investment at $90 per share (a 46.4% premium to the $61.46 August 2024 unaffected price), lifting its ownership from 37.6% to 48.0% without a change of control. Bill Ackman, Ryan Israel and Ben Hakim would run HHH as a diversified holding company — a modern-day Berkshire Hathaway — while HHC continues its MPC strategy under David O'Reilly for a 1.5% advisory fee with no promote.
SCQA
Howard Hughes Holdings owns premier master-planned communities in Texas, Nevada, Hawaii, Maryland and Arizona, operates as a small-cap C-Corp real-estate developer, and Pershing Square has been its largest shareholder since 2010 with 37.6% ownership.
HHH has traded at a ~40% discount to NAV for years; a 2019 strategic review drew no bids and a 2024 four-month privatization process with 284 investors and 40 NDAs produced zero formal offers — leaving no standalone path to fair value.
Allow Pershing Square to invest $900 million of primary capital at $90 per share (46.4% premium) to reach 48% ownership, install Ackman/Israel/Hakim as HHH leadership, and enter a 1.5% advisory-fee Services Agreement with no promote.
HHH becomes a modern-day Berkshire Hathaway with a vastly expanded investor base, macro hedging, and proprietary deal flow — the Board's hurdle is whether this delivers at least 150 bps of annual excess equity return for shareholders.
The three reasons
- 1
HHH stuck at ~40% NAV discount with no take-private bidder after 284 investors approached
- 2
$900M primary issuance at 46.4% premium is accretive and funds a credit-positive cash war chest
- 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, Ryan Israel as CIO, Ben Hakim as President
- Transform HHH into a diversified holding company while HHC continues its MPC strategy under David O'Reilly
- Maintain NYSE listing and majority-independent Board with 31.3M public float
KPIs cited
Pattern membership
Precedents cited
- Berkshire Hathaway (modern-day holding company analogue)
- Brookfield listed entities — BIP, BEP, BBU evergreen services agreements
- Pershing Square's 2020 $500M backstop of HHH's $600M rights offering
- Pershing Square's privately negotiated stakes in Restaurant Brands and Universal Music Group
- Pershing's 2010 $250M rights offering that recapitalized HHC post-GGP spin
Composition what's on the 55 slides
Slide gallery ·
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 ('undermines MPC strategy and incurs tax friction'). Frames the ask as two simple Board questions (p14) and closes with the explicit 150 bps excess-return hurdle (p44). The 'modern-day Berkshire Hathaway' framing on p52 is the central narrative anchor. Heavy benchmarking of the 1.5% advisory fee against Brookfield listed entities, traditional PE, non-traded REITs, and non-traded PE. Culminates a ~15-year Pershing-HHH engagement dating back to the 2010 GGP spin. Pages 3, 15, 33, 45, 53 are section dividers; pages 54-55 are disclaimers. Every page carries a '10xebitda.com' watermark confirming this is the publicly filed version.