Lennar to Buy WCI Communities as Florida Housing Recovery Continues
The deal combines two of the largest home builders in the state
By AUSTEN HUFFORD
Updated Sept. 22, 2016 10:28 a.m. ET
Lennar Corp. will buy WCI Communities Inc. for about $643 million, a move that combines two of the largest home builders in Florida as the housing recovery continues.
Lennar will pay $23.50 a share in cash and stock for WCI, a 37% premium over WCI’s closing share price Wednesday.
“WCI’s land portfolio dovetails perfectly with our own Florida footprint and expands our product offering to capture more of the move-up market,” Lennar Chief Executive Stuart Miller said.
The offer will be $11.75 in cash and $11.75 worth of Lennar shares.
WCI has a 35-day “go-shop” period in which it will solicit and evaluate potential alternative offers.
The deal is subject to approval by WCI stockholders. A vote is expected to occur in December or January.
Shares of WCI rose 41% in morning trading to $24.19 and Lennar shares rose 2% to $44.35.
In recent quarters, home builders have seen increases in average price per home and in the number of homes delivered as the housing market continues its recovery from the 2007 financial crisis.
WCI also said it had reached retention agreements with its chief executive, chief financial officer and the president of its north region to stay 120 days after the deal closes.
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Ali H. Johnston, MHA, MBA in Real Estate
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West Villages Realty LLC