Ackman ups stake to 30% in Summerlin developer Howard Hughes Corp.
After booking a huge windfall shielding himself from stock market chaos, hedge fund operator Bill Ackman is upping his stake in Summerlin developer Howard Hughes Corp. by half a billion dollars.
Hughes Corp., developer of Las Vegas’ largest master-planned community and projects in other states, announced Friday it agreed to sell 10 million shares at $50 apiece, a steep discount from a month or so ago, to Ackman’s Pershing Square Capital Management. It expects to reap $488 million in net proceeds on the deal.
Ackman, a 53-year-old billionaire, is chairman of Hughes Corp.’s board of directors. He owned more than 1.2 million shares of company stock as of a year ago, giving him a 2.8 percent ownership stake, though under the deal announced Friday his stake would climb to about 30 percent, securities filings show.
The Dallas-based developer also said Friday it would sell 2 million shares to the public at $50 apiece, generating $94 million in net proceeds, and that it granted the financial firms acting as “bookrunners” on the deal an option to buy 300,000 shares at the same price.
Hughes Corp. stock rose 3.94 percent Friday, or $2.11, to close at $55.61, while the Dow Jones Industrial Average fell 4.06 percent and the S&P 500 tumbled 3.37 percent, according to Yahoo Finance.
Ackman’s increased investment comes as the new coronavirus sparks turmoil across the U.S. with sweeping business closures and stay-at-home orders in an effort to contain its spread. The stock market has also been plunging, and Ackman announced Wednesday he made more than $2 billion protecting himself from the volatility.
Pershing Square had spent $27 million on credit protection amid concerns of the virus’ effect on financial markets and the broader economy, then booked $2.6 billion in proceeds on the bets, Ackman wrote in a letter to investors.
Hughes Corp. is one of many companies whose stock price has dropped sharply as the virus upends daily life. On Feb. 20, its shares closed at $129.35.
The developer sells land to homebuilders in Summerlin, which spans 22,500 acres along the valley’s western rim and commands some of the highest home and land prices in Southern Nevada. It also owns the 106-acre, open-air Downtown Summerlin mall, the Las Vegas Aviators minor league baseball team and the team’s stadium, Las Vegas Ballpark.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.