Homebuilder D.R. Horton announced it submitted a proposal to the board of directors of Forestar Group to acquire 75% of the currently outstanding shares of Forestar.
The builder stated it would pay $16.25 per share in cash, representing a 14% premium over the purchase price to be paid to the Forestar stockholders pursuant to the existing merger agreement between Forestar and affiliates of Starwood Capital Group.
Through the proposed agreement, Forestar would remain a public company and would be led by new executive chairman Donald Tomnitz, who served as CEO of D.R. Horton for more than 15 years.
D.R. Horton added that it has the cash and other immediately available capital to fund the approximately $520 million investment.
“We believe that D.R. Horton is uniquely positioned to make Forestar the country’s leading residential land development company. Together, we can grow Forestar into a much more significant and valuable company for all of its stockholders,” said Donald R. Horton, chairman of the board.
“The Forestar proposal is a continuation of D.R. Horton’s stated strategy of expanding relationships with land developers across the country and growing the optioned portion of its land and lot position to enhance operational efficiency and returns,” said Horton. “We urge the Forestar board to act quickly on this proposal which is in the best interests of their stockholders.”
