Key Takeaways

Billionaire Bill Ackman ’s investment firm Pershing Square has offered to buy the remainder of real estate developer Howard Hughes Holdings ( HHH ) for $85 per share, driving its stock higher.

The $85-per-share offer represented an 18% premium over Friday’s closing price of $71.78. Shares of Howard Hughes jumped 9% to $78.68 intraday Monday and are roughly flat over the past year as a result.

Ackman called Howard Hughes’ previous stock performance “extremely disappointing,” noting it has generated just a 2.2% compound annual return since going public in 2010.

Pershing already owned 38% of Howard Hughes as of Nov. 14, according to a Securities and Exchange Commission filing. To buy the remainder, Ackman proposed the creation of a Pershing Square subsidiary that would merge with Howard Hughes, effectively buying the remaining shares.

Current Howard Hughes investors would have the option to accept the $85 offer or roll-over their investment into the new combined company, the letter said.

While the real estate operations would remain unchanged, Ackman said his goal is to turn Howard Hughes Holdings into a "modern day Berkshire Hathaway ( BRK.A ; BRK.B )."

Howard Hughes did not immediately respond to a request for comment.

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