Summerlin developer lands $1B buyout offer
With a $1 billion buyout offer on the table, Summerlin’s developer could undergo another corporate shakeup.
Howard Hughes Holdings said Monday that billionaire Bill Ackman’s Pershing Square Capital Management proposed a deal that would result in the New York hedge-fund operator owning a majority of the company’s shares. It noted that Pershing already owns 37.6 percent of Hughes Holdings’ stock.
Under the plan, Pershing would buy out other stockholders at $85 per share for $1 billion total, according to a letter from Ackman that was filed with the Securities and Exchange Commission.
Ackman, the former chairman of Texas-based Hughes Holdings, cited an “extremely disappointing” stock-price performance and wrote that he envisions the developer as a diversified holding company. As he sees it, the company would acquire controlling stakes in operating enterprises, similar to billionaire Warren Buffett’s famed conglomerate.
“With apologies to Mr. Buffett, (it) would become a modern-day Berkshire Hathaway,” Ackman wrote.
Corporate shakeups
Hughes Holdings has projects and properties in Texas, Arizona, Hawaii, Maryland and Nevada. Spanning 22,500 acres along the Las Vegas Valley’s western rim, Summerlin boasts 120,000-plus residents, some of the highest home prices in Southern Nevada and a network of parks, trails and community centers.
Hughes Holdings sells land in Summerlin to homebuilders and has developed hundreds of millions of dollars’ worth of projects in the heart of Las Vegas’ biggest master-planned community.
The company said Monday there can be no assurance it pursues the proposed buyout. But if the sale happens, it would mark the latest change in ownership for the developer.
Its namesake, Howard Hughes, the famed aviator, business tycoon and recluse, acquired the land now known as Summerlin in the 1950s. He died in 1976.
Summerlin started taking shape in the early 1990s, and Hughes’ heirs sold the Howard Hughes Corp. in 1996 to Maryland developer Rouse Co. in a $520 million deal.
Chicago mall giant General Growth Properties acquired Rouse in a $12.6 billion deal in 2004 as the real estate bubble inflated. But after the bubble burst and the economy crashed into the worst recession in decades, General Growth filed for bankruptcy in 2009.
As part of its exit from bankruptcy in 2010, it spun off The Howard Hughes Corp. as a separate company with control over Summerlin and other communities and properties around the country.
Downtown Summerlin opens
The new owners marked a huge milestone in 2014 with the debut of Downtown Summerlin and its 106-acre outdoor mall at Sahara Avenue and the 215 Beltway. General Growth had halted construction on the sprawling retail project years earlier when the economy tanked, leaving a steel skeleton off the side of the freeway.
The Howard Hughes Corp. went on to build other big projects near the mall, developing apartments, office buildings and the 10,000-person capacity Las Vegas Ballpark, home of the Las Vegas Aviators minor-league baseball team, which the company also owned. The stadium was backed by an $80 million naming-rights deal with the Las Vegas Convention and Visitors Authority, the region’s taxpayer-funded tourism agency.
More corporate changes also were on the way.
In 2023, the developer formed a holding company structure that made Howard Hughes Holdings the parent entity, which last year spun off its entertainment division into a separate company called Seaport Entertainment Group.
Hughes Holdings still operates the Downtown Summerlin mall, while Seaport’s portfolio includes the Aviators and the ballpark.
‘Let’s give this bird some wings’
Ackman’s buyout offer was not a complete surprise. Last summer, Hughes Holdings reported that Pershing, its largest shareholder, had stated in a regulatory filing that the firm was evaluating potential alternatives for its investment in the developer.
Among the possibilities: Pershing would buy up shares in the company and take it private.
On Monday, Ackman wrote in his letter to the board that his firm is the right long-term owner for the company.
“With reference to Howard Hughes Holdings’ namesake – one of the world’s greatest aviators and entrepreneurs – let’s give this bird some wings,” he wrote.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.