Want to be on par with Buffett? Hedge fund tycoon Ackman seeks to merge with real estate developer Howard Hughes (HHH.US) to create a modern version of Berkshire Hathaway!

Billionaire hedge fund manager Bill Ackman has proposed merging a subsidiary with real estate developer Howard Hughes (HHH.US) at a price of $85 per share through Pershing Square. Ackman proposed the merger to create a company that he believes can mimic Warren Buffett's Berkshire Hathaway. His hedge fund proposed acquiring approximately 11.8 million shares of Howard Hughes at $85 per share, with the majority of the premium to be paid in cash. Pershing Square will establish a subsidiary to merge with the real estate developer. This will be a $1 billion acquisition, along with a repurchase of $500 million of Howard Hughes Company's stock. Ackman wrote, "Apologies to Mr. Buffett, Howard Hughes will become the modern Berkshire Hathaway, acquiring controlling stakes in operating companies." He referred to the billionaire who has long served as CEO and Chairman of Berkshire Hathaway. Berkshire Hathaway is a holding company that acquires and invests in many other businesses in various sectors - from shoe and apparel brand Bruker Corporation to residential real estate company American Home Shield, to See's Candies and insurance giant Geico. The acquisition offer stems from Ackman's dissatisfaction with the stock price of this Texas-based developer. Howard Hughes' stock price rose by around 9% on Monday, but has fallen by approximately 24% over the past three years. He wrote, "While we are pleased with the significant business progress made by Howard Hughes over its 14 years as a public company, we, like other long-term shareholders and the board, have been disappointed with the company's stock performance." Pershing Square owns approximately 38% of Howard Hughes, and Ackman served as the company's Chairman for over a decade until stepping down last year. Depending on the number of investors accepting the acquisition offer, Pershing Square will hold 61% to 69% of the shares. If the merger is successful, Ackman will become Chairman and CEO of Howard Hughes. However, his intention is for David O'Reilly, the CEO of Howard Hughes, and his leadership team to continue steering the real estate subsidiary, with all employees being retained. Ackman stated that he will focus on maintaining Howard Hughes' stock on the New York Stock Exchange, and intends to "permanently" hold the stock. Ackman appears to see value in the path to "excess cash resources", as he expresses doubts that Howard Hughes is following this path.