(Reuters) - Billionaire investor Bill Ackman's Pershing Square Capital Management said on Tuesday it would buy 10 million newly issued shares of Howard Hughes Holdings ( HHH ) for $900 million as it revised its proposal to the real estate developer.

Shares of Howard Hughes dipped 5% in extended trading.

Under the proposal, Ackman would become chairman and CEO of Howard Hughes, Pershing said, adding the company's current CEO, David O'Reilly, will lead its principal subsidiary, Howard Hughes Corp.

The proposal would take Pershing's stake in Howard Hughes to 48% from the 37.6% it currently owns and replaces a previous offer of $1 billion made in January that would have increased its stake to between 61% and 69%.

Howard Hughes said in a statement late on Tuesday that its special committee would evaluate the revised offer and determine an appropriate course of action.

Pershing Square's management team will not receive cash, equity or other compensation in the transaction, but requires Howard Hughes to pay a 1.5% annual fee of its market capitalization to Pershing under a services agreement.

Howard Hughes currently has a market capitalization of about $3.8 billion, according to LSEG data.

Pershing said it would finance the deal for Howard Hughes, which owns and manages commercial, residential and mixed-use real estate in the U.S., with cash on hand.

Earlier in the day, Ackman said in a post on X that Pershing would announce a potential transaction to create a "modern-day version of Berkshire Hathaway."

Ackman has been personally involved with Howard Hughes for a decade and stepped off the company's board in April after having served as its chairman since 2010.

(Reporting by Utkarsh Shetti in Bengaluru, Additional reporting by Pretish M J; Editing by Shilpi Majumdar and Anil D'Silva)