(Reuters) -Billionaire investor Bill Ackman’s Pershing Square Capital Management will buy 9 million newly issued shares of real estate developer Howard Hughes Holdings for $900 million, the companies said on Monday.

The agreement will increase Pershing’s stake in Howard Hughes to 46.9% from 37.6% it currently owns, the companies said. Shares of Howard Hughes were up 11% in premarket trading.

Ackman plans to use the acquisition to create what he has called a “modern-day Berkshire Hathaway,” turning the real estate firm into a holding company that acquires controlling stakes in smaller businesses.

“We believe HHH is a superb platform to build a faster-growing, high-returning holding company that will acquire control of companies that meet Pershing Square’s criteria for business quality and durable growth,” Ackman said.

Howard Hughes had rejected Ackman’s previous offer of $900 million for 10 million shares, which would have raised Pershing’s stake in the company to 48%, calling the proposal “not acceptable in its current form.”

Ackman, who began his career as a corporate activist by pressuring companies such as Canadian Pacific Railway to improve performance was a part of Howard Hughes for more than a decade and stepped off the company’s board last year after having served as its chairman since 2010.

He will now return as executive chairman, while Pershing Square’s chief investment officer, Ryan Israel, is set to assume the same role at Howard Hughes.

The leadership team at Howard Hughes, led by CEO David O’Reilly, will remain intact, with expanded roles and responsibilities, while other employees will see no changes.

Pershing Square has agreed to cap its voting power in Howard Hughes at 40% and limit its beneficial ownership to 47%, the companies said on Monday.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Shinjini Ganguli)