Bill Ackman struggles to gain Wall Street's support for Howard Hughes acquisition
- Investors are doubtful about Bill Ackman's revised proposal to acquire Howard Hughes shares at $90 each.
- Analysts criticize the proposal for not providing immediate cash realization for current shareholders.
- The lack of reassurance in the offer raises concerns for existing investors as the stock shows volatility.
On February 18, 2025, investor Bill Ackman presented a revised proposal to acquire shares of the real estate developer Howard Hughes. This proposal was for 10 million newly issued shares priced at $90 each. This offer was an improvement over Ackman's earlier January proposal, which valued shares at $85 each. Despite this higher price, Wall Street analysts expressed skepticism regarding whether this new proposal sufficiently benefits existing shareholders. JMPorgan and Piper Sandler analysts noted that the offer does not provide immediate cash realization for current shareholders and may require them to place their faith in the future success of Howard Hughes under Ackman's management. Their analysis suggested that the plan lacks the necessary elements to reassure investors, particularly as it introduces management fees that could further complicate shareholder equity. As a result, the stock saw significant fluctuations, closing up 6.8% before seeing a 7% decrease the next day following the announcement of the new proposal. The revised offer does not require regulatory approvals or shareholder votes, indicating a quick potential execution of the deal if it proceeds. Analysts highlight that the lack of clear financial benefits and the shift towards a model inspired by Warren Buffett did not suffice to quell investor concerns. Eventually, this skepticism may lead to reluctance among existing Howard Hughes shareholders and a struggle to execute the transformative aspirations Ackman aims to achieve through this acquisition.