Investors Sue Pershing Square Over $900M Howard Hughes Deal at 48% Premium
Investors sued over Pershing Square’s $900 million purchase of Howard Hughes shares at a 48% premium, boosting its stake to 47% and granting operational control and quarterly fees while naming Bill Ackman executive chairman. The complaint alleges the deal’s “unfair” price and threats to directors harmed minority shareholders.
1. Class Action Filed Against Pershing Square
A Delaware Chancery Court lawsuit was unsealed alleging Pershing Square coerced Howard Hughes directors into approving a transaction that disadvantaged minority shareholders. The complaint names Pershing Square, Bill Ackman and company directors as defendants.
2. Deal Boosts Stake with $900M Share Purchase
In May investors approved Pershing Square’s $900 million acquisition of newly issued shares at a 48% premium, raising its stake to nearly 47% from 37%. The agreement also entitles Pershing Square to quarterly management fees and seats Ackman as executive chairman.
3. Allegations of Coercion and Unfair Terms
The lawsuit argues that Ackman’s threats to board members pressured them into accepting an “unfair” price without a control premium for minority investors. Plaintiffs assert Pershing Square gained operational and managerial control at shareholders’ expense.
4. Pershing Square’s Response and Ackman’s Strategy
Pershing Square has labeled the lawsuit as meritless, defending the transaction’s terms and pricing. Ackman’s long-term plan is to model Howard Hughes after Berkshire Hathaway by leveraging capital to acquire controlling interests in other businesses.