Pershing Square Holdings (PSH) Investor Update summary

Transaction overview and rationale

• Pershing Square proposes to invest $900 million to buy 10 million newly issued shares at $90 each, a 46.4% premium to the unaffected price, increasing its stake from 37.6% to 48% without a change of control.

• The transaction is funded with cash from Pershing Square's balance sheet, requires no financing, and can be completed quickly, providing immediate capital to the company and improving its credit profile.

• The public float remains unchanged at 52%, and the board will continue to be majority independent, with three Pershing Square directors and at least one new independent director added.

• The deal requires only Special Committee and board approval, with no regulatory or shareholder vote needed.

• The revised transaction was shaped by feedback from shareholders and the Special Committee, prioritizing capital infusion and long-term growth over a leveraged buyout.

Strategic transformation and management

• Pershing Square aims to transform the company into a diversified holding company, leveraging its full investment, legal, and operational resources.

• Bill Ackman will become Chairman and CEO, with other key Pershing Square executives taking leadership roles.

• The real estate subsidiary remains unchanged, led by the current management team, while Pershing Square will manage the holding company for a 1.5% fee on market cap, with no performance or equity-based compensation.

• Pershing Square's management team will oversee risk hedging for the real estate and master planned communities business.

• The team brings extensive public and private equity experience, a long-term investment approach, and a strong track record of value creation.

Fee structure and alignment

• The 1.5% management fee is lower than comparable vehicles and includes no performance or incentive fees, aligning interests with shareholders.

• Net incremental fees to Pershing Square are about half the headline rate due to rebates and self-investment, with the majority of economic upside coming from their equity investment.

• The management team is highly invested, with a $1.3 billion look-through stake, and commits to permanent ownership of the new shares.