03:46 PM EDT, 05/05/2025 (MT Newswires) -- Howard Hughes (HHH) raised $900 million via newly-issued shares that investment firm Pershing Square acquired, as the real estate developer seeks to transform into a diversified holding company.

Pershing Square bought 9 million shares in Howard Hughes for $100 per share, representing a 48% premium to the stock's closing price on Friday, the companies said Monday. The transaction gives the investment firm a 46.9% stake in the listed company, though Pershing Square agreed to limit its voting power to 40%.

Shares of Howard Hughes were up 3.3% in late Monday afternoon trade.

"Pershing Square's investment will create new avenues for growth, while our core business as the nation's leading community builder will not change," Howard Hughes Chief Executive David O'Reilly said in the joint statement. "We remain steadfast in our commitment to creating exceptional communities, pursuing innovative development opportunities and acting nimbly to meet market demand and deliver sustainable growth."

With Pershing Square's support, Howard Hughes "will seek to acquire controlling interests in high-quality, cash-flow-generative public and private companies," according to Scot Sellers, chair of a Howard Hughes committee that negotiated the deal.

Following the deal, Pershing Square Chief Executive Bill Ackman will serve as executive board chairman at Howard Hughes, while Pershing Square Chief Investment Officer Ryan Israel will take on the same role at the real estate developer.

"(Howard Hughes) has built substantial value for shareholders in recent years that has largely gone unrecognized due to the high cost of capital that the market assigns to the company in light of its pure-play exposure to real estate development and community creation," Ackman said. "We believe that (Howard Hughes) is a superb platform to build a faster-growing, high-returning holding company that will acquire control of companies that meet Pershing Square's criteria for business quality and durable growth."

Howard Hughes' board will in the future be composed mostly of independent directors, with Pershing Square having the right to nominate three directors as long as it continues to beneficially own at least 17.5% of the fully diluted shares of the company, according to the statement.

Price: 69.77, Change: +2.30, Percent Change: +3.41