The board of Howard Hughes Holdings has turned down a fresh acquisition bid from Bill Ackman’s Pershing Square Capital Management.
The board labeled the offer from the hedge fund “not acceptable in its current form,” according to a statement reported by Bloomberg. Pershing Square already holds a 38 percent stake in the Houston-based development company, which specializes in master-planned communities.
Both sides signed a standstill agreement, which is in effect until March 13, to allow further talks on possible alternatives.
Pershing Square submitted a new offer last month, proposing to acquire 10 million of newly issued Howard Hughes shares for $90 apiece. The $900 million deal would raise its stake in the company from 37.6 to 48 percent. Pershing’s plan would keep current leadership, with CEO David O’Reilly staying on post-merger.
The firm originally aimed for a majority stake in Howard Hughes when it proposed buying 11.8 million shares at $85 each. The $1 billion buyout proposal, first floated in January, also included a $500 million stock buyback funded by new bonds.
Ackman’s pursuit of Howard Hughes began gaining traction after an August SEC filing signaled his intent to take the company private. Howard Hughes responded by forming a committee to weigh the idea.
Pershing’s stake traces back to 2010, when Howard Hughes split from General Growth Properties. Ackman stepped down as board chair last April. He was succeeded by Scot Sellers, former CEO for Archstone.
Howard Hughes recently shed its entertainment assets, spinning off Seaport Entertainment Group — nearly 500,000 square feet of Manhattan retail and dining space — where Pershing also holds 38 percent.
The billionaire hedge fund manager also recently listed his 6,000-square-foot Central Park West duplex. Ackman listed the property in November for $19.9 million, which would be a $2.1 million loss from the $22 million he paid for it in 2017.
His other real estate assets include a glass penthouse on West 77th Street, which he bought for $22.5 million. Ackman was also part of a group that purchased a $91.5 million penthouse at One57, later attempting to sell it for $500 million.
— Andrew Terrell
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