Howard Hughes Holdings Inc. (NYSE: HHH) announced a significant acquisition on Thursday, confirming a deal to purchase Vantage Group Holdings Ltd. for a total of $2.1 billion in cash. This strategic move marks a pivotal shift for Howard Hughes as it aims to evolve into a diversified holding company. Vantage, founded in 2020, is a privately held leader in specialty insurance and reinsurance, supported by notable investment firms including The Carlyle Group Inc. (NASDAQ: CG) and Hellman & Friedman.
The acquisition price reflects approximately 1.5 times Vantage’s projected year-end 2025 book value, with an implied price-to-book multiple of around 1.4. Howard Hughes plans to finance the acquisition primarily with existing cash reserves of approximately $1.5 billion as of September 30, 2025. Additionally, the company will utilize up to $1 billion in non-interest-bearing, non-voting preferred stock issued to Pershing Square Holdings, Ltd. (PSH).
The PSH preferred stock will be structured into 14 equal tranches. Howard Hughes can repurchase these tranches annually for the first seven years post-closing, with the repurchase price being the greater of the original issue price plus 4% per year or 1.5 times Vantage’s book value, calculated per GAAP standards.
The transaction is anticipated to conclude in the second quarter of 2026, pending customary regulatory approvals.
Management from Howard Hughes expressed optimism regarding the acquisition. Bill Ackman, Executive Chairman, emphasized the advantages of Vantage’s “exceptional diversified specialty insurance and reinsurance platform” and the expertise of its management team. He noted that the combination of Vantage’s insurance proficiency with the investment capabilities of Pershing Square creates a pathway to build a substantial and profitable insurance entity.
Chief Investment Officer Ryan Israel added, “If we achieve our objectives in running a profitable insurance operation and managing Vantage’s assets to generate highly attractive long-term rates of return, we believe that Vantage will generate high returns on equity for decades to come.” Israel pointed out that the deal is structured to allow Howard Hughes to gain full legal ownership of Vantage immediately, with plans to enhance its economic ownership over time.
Following the announcement, shares of Howard Hughes Holdings experienced an increase of 2.27%, trading at $84.85 at the time of publication, according to data from Benzinga Pro.
This acquisition represents a significant investment in the insurance sector, positioning Howard Hughes for future growth and stability. As the company moves forward, the integration of Vantage will likely play a crucial role in its transformation strategy.
