Pershing Square to Invest $900 million to Acquire Nine Million Newly Issued Shares of Howard Hughes Holdings and Transform HHH Into a Diversified Holding Company

Core Viewpoint - Pershing Square is investing $900 million in Howard Hughes Holdings Inc. (HHH) to support its strategic expansion into a diversified holding company, acquiring controlling interests in high-quality public and private companies while continuing its core real estate development business [2][9]. Investment Details - Pershing Square will acquire 9,000,000 newly issued shares of HHH at $100.00 per share, representing a 48% premium to HHH's closing price on May 2, 2025 [3][9]. - Following the investment, Pershing Square will own 46.9% of HHH shares outstanding, with an agreement to limit its voting power to 40% and beneficial ownership to 47% [3][6]. Leadership Changes - Bill Ackman, Chairman and CEO of Pershing Square, has been appointed as the Executive Chairman of HHH's Board of Directors, while Ryan Israel will take on the role of Chief Investment Officer at HHH [4][9]. - The existing leadership team at HHH, led by CEO David O'Reilly, will remain unchanged but will have expanded roles and responsibilities [4][11]. Strategic Support - The entire Pershing Square organization will provide HHH with investment, advisory, and ancillary services, including corporate development and capital markets assistance [5][9]. - HHH will continue to develop its core Master Planned Communities and other strategic developments, maintaining its position as a leading community builder [10][11]. Financial Arrangements - HHH will pay Pershing Square a quarterly base fee of $3.75 million and a management fee based on the increase in HHH's equity market capitalization above a predetermined reference market cap [7][8]. - The reference market cap is calculated using a post-transaction share count of 59,393,938 and a reference market price of $66.1453, adjusted annually for inflation [7]. Governance Structure - The transaction was approved by HHH's Special Committee, composed entirely of independent directors, and will result in a board with a majority of independent directors [12][13]. - Pershing Square has the right to nominate three directors as long as it holds at least 17.5% of HHH's fully diluted shares [13].