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good morning, do any of you watch Bloomberg, CNBC, fox business, in the morning? Several observers are opining that Ackman hopes to follow the Buffett business plan of acquiring companies within this entity. Tuff crowd.
You didn't say any of that in your OP. We were left guessing, as usual.
Here's Dealbook from NYT:
Ackman’s latest plan to build a new Berkshire Hathaway
Bill Ackman cannot be accused of thinking small. His latest big deal shows why.
The billionaire hedge fund manager said today that his Pershing Square would bid to buy the roughly 62 percent of Howard Hughes Holdings, a real estate company, that it doesn’t own for $85 a share. But the bigger news is that if a deal is reached, Ackman wants to turn Howard Hughes into a publicly traded vehicle for buying other companies — and turn himself into a Warren Buffett-esque investor.
“With apologies to Mr. Buffett, HHH would become a modern-day Berkshire Hathaway,” Ackman wrote in a public letter to Howard Hughes shareholders. Here’s how it would work:
Pershing Square Holdco, the parent company of Ackman’s hedge fund, would create a new subsidiary to buy and hold Howard Hughes, whose assets include office buildings and planned communities. Pershing plans to own the real estate business “forever.”
Ackman believes that Howard Hughes will soon begin generating “substantial excess cash resources.” That money, coupled with Pershing’s ability to scout out profitable investments, could then be used to buy entire companies and other assets, much as Berkshire Hathaway uses the enormous stockpile of cash from its insurance arms to do deals.
Ackman sees the deal as setting up Pershing’s next era. He shot to fame and riches as a prominent activist investor, and minted billions more with profitable bets on hedging against the pandemic and inflation.
Since then, he has focused on raising what he calls “permanent capital” via a closed-end fund that trades on the London Stock Exchange. Last year, he tried but then called off plans to raise an even bigger fund in New York, which he had hoped to use to make the kinds of big bets that Buffett has made.
One question: What does Ackman see in Howard Hughes? He orchestrated its creation via a spinoff from the bankrupt real estate giant General Growth Properties 15 years ago.
But Howard Hughes’s stock has been hugely volatile since then, and has fallen 10 percent over the past 12 months alone amid choppy financial performance. Unusually, Ackman said he didn’t plan to change the company’s management or business plans.
