Bill Ackman Weighs Taking Howard Hughes Holdings Private

Bill Ackman’s Pershing Square Capital is considering taking Howard Hughes private, according to a filing with the Securities and Exchange Commission. Pershing Square is already the developer’s largest stockholder, controlling about 18.9 million shares, or 37.5 percent, of the company’s common stock.

Unsurprisingly, both companies outlined few details beyond those required by law. Pershing Square said it may bring in one or more co-investors on the deal and may discuss it with them confidentially. It also said that, aside from a take-private, it is considering “various potential alternatives,” though a take-private was the only one explicitly mentioned.

Investment bank Jefferies is advising on the potential deal.

In response to Pershing Square’s filing, Howard Hughes said it will form a committee of independent directors to evaluate a so-called take-private deal.

“[Howard Hughes] does not intend to comment further on these matters until [it] determines that additional disclosure is appropriate or required by law,” the company wrote in its own filing with the SEC.

The companies have long-running ties. In April, Ackman stepped down as chairman of Howard Hughes’ board, a role he had held since it spun off from General Growth Properties in 2010. At the time, Howard Hughes was a “complicated collection of development assets, master planned communities, income-producing properties and other assets,” Ackman said in a news release when he stepped down. Scot Sellers, the former CEO of multifamily firm Archstone, took over as board chairman, but Pershing Square partner Ben Hakim joined the board, maintaining the companies’ tie.

The potential deal comes at a complicated time for Howard Hughes. The company just finished spinning off several of its entertainment-related assets into a new firm, Seaport Entertainment Group. Those holdings include 478,000 square feet of retail, entertainment and dining space in lower Manhattan, a 25 percent stake in Jean-Georges restaurants and a minor league baseball team in Las Vegas. Pershing Square owns about 38 percent of Seaport Entertainment.

Without those assets, Howard Hughes is now focused purely on real estate. Its portfolio spans more than 100,000 acres, including nearly 35,000 acres in its land bank. Its most famous development in Texas, the Woodlands, launched the state’s master-planned community market and continues growing decades after its foundation.