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ershing Square's Bill Ackman is forming a new entity to merge with Howard Hughes Holdings, offering current shareholders $85 per share. In a letter to the board, Ackman expressed disappointment with the company's 14-year stock price performance, citing a mere 2.2% compound annual return and zero dividends paid since inception.

    Ackman proposed merging Pershing Square's subsidiary with Howard Hughes, which it currently owns about 38%. Shareholders would have the option to receive cash or stock in the post-merger company, representing a premium of 38.3% over the unaffected stock price. The deal was met with a 10% jump in Howard Hughes shares to $78.95 on Monday.

    Pershing Square first invested in Howard Hughes in 2010 at $47.62 per share and has seen a 35% total return, or 2.2% compound annual return, over the past 14 years. Ackman praised the company's management team and employees but expressed frustration with the stock price performance.

    Under the proposed deal, Howard Hughes would remain unchanged, with its leadership team and employees continuing to manage the company as usual. The merger is expected to result in no changes to the organization or long-term strategy.