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 new debt, and can be completed quickly, providing immediate capital for strategic execution.

• The cash infusion is expected to improve the company's credit rating and financial flexibility, supporting new development opportunities.

• The public float remains unchanged at 52%, and the board will stay independent, maintaining robust governance.

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

Strategic transformation and management

• The company will transition into a diversified holding company, leveraging Pershing Square's full resources and expertise.

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

• Pershing Square will receive a 1.5% management fee on market cap, with no performance or incentive fees, and no cash or stock compensation as employees.

• The management team brings a long-term, risk-focused investment approach, emphasizing macroeconomic hedging and operational expertise.

• The holding company will target control investments in both public and private businesses, focusing initially on North America and potentially the UK.

Fee structure and alignment

• The 1.5% fee is lower than comparable vehicles when adjusted for total capitalization and lacks performance fees, with rebates to Pershing Square fund investors to avoid double fees.

• Net incremental fees to Pershing Square are about 0.8% of market cap, with the majority of economic upside coming from the equity investment, not fees.

• The management team’s incentives are closely tied to long-term stock performance, with a permanent $1.3 billion investment.

• The investment team and partners will have a significant personal stake, aligning interests with shareholders.