Bill Ackman’s Pershing Square Capital Management is proposing to merge its newly formed subsidiary with Howard Hughes Holdings Inc., Ackman’s latest attempt to transform Howard Hughes into an empire on par with Berkshire Hathaway.

The proposal comes just five months after Ackman shared his interest in taking private the master-planned community development and management company of which his firm is the largest shareholder.

In a letter to Howard Hughes’ board, Pershing Square offered $85 per share for the 11.8 million shares that Pershing Square affiliates do not already own, or about $1B. The merger would leave Howard Hughes Corp. unchanged but make Howard Hughes Holdings a diversified holding company, according to the letter.

“With apologies to Mr. [Warren] Buffett, HHH would become a modern-day Berkshire Hathaway that would acquire controlling interests in operating companies …  HHC is on the path to soon begin to generate substantial excess cash resources above and beyond investments in new property developments and amenities,” Ackman said in the letter.

HHH would invest excess cash resources of its HHC subsidiary into new companies and assets “with the long-term goal of growing HHH’s per-share intrinsic value at a high compound rate of return,” the letter states.

This is Ackman’s latest effort to take control of the Houston-based company he helped create. Ackman stepped down as HHH's chairman in April, but Pershing Square owns more than 37% of HHH’s stock.

In an August regulatory filing, Ackman said that he was considering acquiring all of HHH’s shares alone or with co-investors. In response, Howard Hughes’ board of directors formed a special committee of independent directors to review any proposal, the company said.

In a release issued Monday afternoon, Howard Hughes said that same committee will “evaluate the proposal and determine the appropriate court of action and process.”

Ackman said he is pleased with Howard Hughes’ business progress in the 14 years since it went public, but he is not happy with the company’s stock price performance, which has paid no dividends and garnered a 35% return over 14 years, he said in the letter Monday.

The lack of stock market recognition for the company’s accomplishments led to Pershing Square’s push to take the company private, but shareholders gave feedback expressing interest in remaining long-term investors in the company, the letter states.

The $85 per share offer is 18.4% higher than the stock’s closing price on Friday. Howard Hughes stock surged in premarket trading Monday in response to the merger proposal, rising 9.4% to $78.50, Bloomberg reported.

Pershing Square may invite “a small consortium of strategic partners” to join it in the transaction, according to the letter.

Howard Hughes Corp. and the master-planned communities it manages, including The Woodlands in Texas, Columbia in Maryland and Summerlin in Nevada, deserve a well-capitalized, diversified, long-term owner and manager, the letter states.

That manager should understand “not just its fiduciary obligation to shareholders, but also its obligations to the hundreds of thousands of current residents and the millions in the future, who will live, work, study, marry, build and grow families, and play in our communities.”

“With reference to Howard Hughes Holdings’ namesake – one of the world’s greatest aviators and entrepreneurs – let’s give this bird some wings,” the letter concludes.

UPDATE, JAN. 13, 4:39 P.M. CT: This article has been updated to include a response from Howard Hughes.