Master-planned community developer Howard Hughes is granting more time for billionaire Bill Ackman's investment holding company Pershing Square to pitch a better offer.
The real estate firm based in the Houston area that owns large U.S. developments announced Monday it is extending its standstill agreement with Pershing Square until Tuesday, April 15th. The agreement to keep discussing Pershing Square's previous proposal to potentially buy Howard Hughes for about $900 million was set to expire this week.
The extension comes as Howard Hughes has rejected two offers by Pershing Square of New York City. Pershing Square's initial offer in mid-January included forming a subsidiary to merge with Howard Hughes and acquire controlling interests in operating companies, much like Warren Buffett's Berkshire Hathaway, a company Ackman referenced in the initial offering.
Howard Hughes, based in The Woodlands, Texas, declined the initial offer. Ackman's company then revised its proposal in mid-February, Pershing Square said in a Securities and Exchange Commission filing. Howard Hughes also rejected that offer.
Even as Howard Hughes offers Pershing Square more time to put together a better offer, the real estate firm said in the Monday statement "there can be no assurance that discussions with Pershing Square will result in any particular outcome."
Howard Hughes declined to comment further beyond the Monday statement. Pershing Square, in its own statement, declined further comment outside of confirming the agreement's extension.
Ackman's firm said the additional time gives the two parties space to "facilitate ongoing discussions" regarding the proposal previously submitted by Pershing Square on Feb. 18.
Pershing Square, through its investment firm Pershing Square Capital Management, in mid-February offered to buy 10 million newly issued shares of Howard Hughes at $90 per share, representing a 46.4% premium to Howard Hughes' stock price on Aug. 5, 2024, according to the SEC filing. The prior offer made in January by Pershing Square was for $85 per share.
For the record
Morgan Stanley & Co. is the financial adviser to Howard Hughes' special committee of the board of directors. Hogan Lovells and Richards, Layton & Finger are legal counsel for Howard Hughes.