Howard Hughes Exploring Options Including a Potential Sale

(Bloomberg) -- Real estate developer Howard Hughes Corp. said it’s working with advisers to explore strategic options including a potential sale of the company. The shares jumped.

Howard Hughes is working with Centerview Partners on the review, which may also result in a sale or spinoff of certain assets, a recapitalization or changes in corporate structure, according to a statement Thursday.

Howard Hughes believes it is worth about $200 a share, based on its estimate of the net value of its assets, according to people familiar with the matter. A sale of assets could include 60 acres of beachfront property in Hawaii, according to the people, who asked not to be named because the matter is private.

The stock surged 37% to $127.05 at 12:01 p.m. New York time. Howard Hughes, whose chairman is hedge fund manager Bill Ackman, has a market value of about $5.3 billion.

“The board and management are determined to close the significant gap between our share price and the company’s underlying net asset value,” Chief Executive Officer David Weinreb said in the statement. “We look forward to reporting to shareholders on the results of our strategic review and will remain focused on executing our plans during this evaluation process.”

A representative for Centerview declined to comment.

Ackman’s Pershing Square Capital Management is one of the largest holders in Howard Hughes, which was spun out of mall owner General Growth Properties in 2010. The company’s portfolio of 59 properties has retail, office, multifamily and hotel assets throughout the U.S.

Howard Hughes is known for its six master-planned communities, including Summerlin in Las Vegas. It is also responsible for developing lower Manhattan’s new Seaport District, a waterfront property with shops, restaurants and rooftop concerts.

To contact the reporters on this story: Scott Deveau in New York at sdeveau2@bloomberg.net;Lily Katz in New York at lkatz31@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Christine Maurus, Matthew Monks

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