Bill Ackman behind $300m tender for Pershing Square shares
Bill Ackman behind $300m tender for Pershing Square shares, sale of Howard Hughes Corp stake to facilitate deal, buyback suspended
Pershing Square Holdings has announced the proposed sale of all of PSH’s 2,067,490 shares of common stock in The Howard Hughes Corporation (NYSE: HHC). Pershing Square is pursuing this sale in order to help facilitate a potential tender offer for its public shares by PSCM Acquisition Co LLC, an entity owned by Mr. William A. Ackman and members of the Pershing Square Capital Management, L.P. advisory board and senior management.
They say that selling Pershing Square’s common stock in Howard Hughes will provide more flexibility under the “United States real property holding company” rules. After the proposed sale, funds managed by Pershing Square Capital Management L.P. will still beneficially own 5.1% of Howard Hughes common stock and will retain an additional 12.5% economic exposure through the ownership of total return swaps, for a total of 17.6% economic exposure.
The Pershing Square management team would like to increase its investment in Pershing Square which it believes is undervalued. In addition, the team believes that the tender should assist in reducing the discount. The board of PSH is supportive but will make no recommendation as to whether individual holders of Pershing Square’s public shares should participate in the tender.
The specific terms of the tender will be made available by PSCM Acquisition Co LLC after the settlement of the Howard Hughes sale. It is anticipated that the tender will be for up to USD300,000,000 in value of Pershing Square’s public shares. In accordance with EU law, Pershing Square is suspending its current share purchase program with immediate effect.
PSH : Bill Ackman behind $300m tender for Pershing Square shares