Homebuilding in Florida
Homebuilder Lennar to buy WCI in $643 million deal to expand in Florida
(Reuters) - Lennar Corp <LEN.N>, the No. 2 U.S. homebuilder, said it would buy WCI Communities Inc <WCIC.N>, which makes luxury homes, in a $643 million-deal that will combine two of the largest homebuilders in Florida.
Lennar's offer of $23.50 per share – half in cash and half in stock – represents a premium of about 37 percent to WCI's Wednesday close. WCI shares rose to $23.50 premarket on Thursday.
Lennar, which mainly caters to buyers looking for a second home, while WCI calls itself a lifestyle community developer and builds single-family and multi-family luxury homes, including luxury high-rise towers.
"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 in a statement.
The transaction, which would be in the form of a merger between WCI and a newly formed Lennar unit, gives WCI an enterprise value of $809 million, Lennar said.
WCI said the merger agreement gave it 35 days to shop for a higher offer.
Lennar said it had the option of increasing the cash portion of the offer, including paying the full amount in cash.
WCI's financial advisers are Credit Suisse and Citigroup Global Markets Inc and its legal advisers are Latham & Watkins LLP.
Lennar's legal adviser is Goodwin Procter LLP and Gibson Dunn & Crutcher LLP is its special tax counsel.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Savio D'Souza)