Howard Hughes Corp Gives Shareholders a Holiday Present

Howard Hughes Corp Gives Shareholders a Holiday Present

This is a nice little Monday morning gift from Howard Hughes Corp (NYSE:HHC) to shareholders….

The Howard Hughes Corporation Announces Retirement of 6,083,333 Sponsor Warrants for $80,548,000 Cash and 1,525,272 Common Shares Shareholders Now Own 10.1% More of the Company as a Result of these Transactions

DALLAS–(BUSINESS WIRE)–Dec. 10, 2012– The Howard Hughes Corporation (“Howard Hughes” or the “Company”) Howard Hughes Corp (NYSE:HHC) today announced that is has retired 6,083,333 Sponsor warrants for $80,548,000 in cash and the issuance of 1,525,272 shares of common stock.

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On December 7, 2012, affiliates of Blackstone Real Estate Partners sold their 333,333 warrants and the Fairholme (MUTF:FAIRX) Funds sold their 1,916,667 warrants to The Howard Hughes Corporation for $30.00 cash per warrant. On November 9, 2012, affiliates of Brookfield Asset Management Inc. (NYSE:BAM) (TSE:BAM.A) exercised a portion of their warrants and sold to the Company the remainder of their warrants in exchange for 1,525,272 shares of the Company’s stock and a net $13,048,000 cash payment. All of the extinguished warrants had a $50.00 per warrant exercise price and a November 2017 expiration date. Together, the warrant transactions reduced diluted shares outstanding by 9.2%, or 4,558,061 shares, as reflected in the table below:

Capture675 Howard Hughes Increases Shareholder Ownership 10%

“I expect that the retirement of these warrants will be significantly accretive because our shareholders will now own 10.1% more of the Company,” said David R. Weinreb, Chief Executive Officer of The Howard Hughes Corp (NYSE:HHC). “Since becoming a public company, Howard Hughes has made substantial progress in advancing the development and redevelopment of our assets. We have built a premier real estate investment and development company and are confident that we will unlock substantial additional value over the next several years as we develop our properties.”

By: valueplays

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.

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