Bill Ackman is trying to make good on his consideration of taking control of Howard Hughes Holdings.
Ackman’s Pershing Square Capital Management is offering shareholders $85 a share as it looks to form an entity to merge with the Houston-based holding company, CNBC reported. Ackman’s offer was disclosed in a letter sent to the Howard Hughes board. Purchasing all the shares it doesn’t own would amount to roughly $1 billion, according to the Wall Street Journal.
The offer represents an 18.4 percent premium on the stock’s closing price on Friday, according to the letter. The stock quickly jumped 10 percent on Monday morning, going as high as $83.61 per share at one point.
Ackman proposed forming a subsidiary of his hedge fund, which already owns 38 percent of Howard Hughes. The two entities would then merge. Leadership would remain unchanged, with chief executive officer David O’Reilly continuing to run Howard Hughes.
A filing with the Securities and Exchange Commission in August revealed Ackman’s interest in taking Howard Hughes private. At the time, Howard Hughes said it would form a committee to evaluate a potential take-private deal.
Pershing’s investment in Howard Hughes dates back to 2010, when the latter spun off from General Growth Properties. Ackman served as the chair of the Howard Hughes board from then until April, when he stepped down from the post; former Archstone chief executive officer Scot Sellers took his place.
Howard Hughes became a pure real estate company recently. It spun off several of its entertainment-related assets into a separate firm, Seaport Entertainment Group. The spinoff includes nearly 500,000 square feet of retail, entertainment and dining space in lower Manhattan. Pershing owns about 38 percent of the entity.
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Meanwhile, Howard Hughes still has a portfolio spanning more than 100,000 acres, including its famed Woodlands master-planned community in Texas, a watershed development for the state.