D.R. Horton and Forestar Announce Successful Closing of Merger and Final Election and Allocation Results
06 October 2017 - 7:40AM
Business Wire
D.R. Horton, Inc. (NYSE: DHI) (“D.R. Horton”), America’s
Builder, and Forestar Group Inc. (NYSE: FOR) (“Forestar”) today
announced the closing of D.R. Horton’s previously announced
acquisition of approximately 75% of the currently outstanding
shares of Forestar for $17.75 per share in cash pursuant to a
merger of a wholly owned subsidiary of D.R. Horton with and into
Forestar.
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The transaction establishes a strategic relationship between
Forestar and D.R. Horton for the supply of developed lots, as an
extension of D.R. Horton’s strategy of increasing its optioned land
and lot position to enhance operational efficiency and returns.
D.R. Horton’s position as Forestar’s controlling stockholder will
also allow D.R. Horton to guide Forestar’s strategic direction,
growth and operational execution to increase the future value
potential of Forestar.
Pursuant to the terms of the merger agreement signed on June 29,
2017, each of the existing members of Forestar’s board of directors
resigned, with the exception of M. Ashton Hudson. Effective as of
the closing of the transaction, Forestar’s board of directors
consists of five directors, including Mr. Hudson, and the following
four new directors: Donald J. Tomnitz, former CEO of D.R. Horton,
who will serve as Executive Chairman of Forestar; Samuel R. Fuller;
G.F. (Rick) Ringler, III; and Donald C. Spitzer.
Final Election and Allocation Results
Pursuant to the terms of the merger agreement and election
materials previously mailed to Forestar stockholders, Forestar
stockholders were permitted to make an election to receive for
their old shares of Forestar common stock either an amount in cash
equal to $17.75 in cash (the cash consideration) or one new share
of Forestar common stock (the stock consideration). The elections
were subject to proration and adjustment procedures to ensure that,
as a result of the merger, D.R. Horton would own approximately 75%
of Forestar’s common stock and Forestar stockholders immediately
prior to the merger would own approximately 25% of Forestar’s
common stock.
The election deadline was 5:00 p.m., ET, September 27, 2017. The
final election results were:
- Holders of 35,326,341 shares of
Forestar common stock, or approximately 84.23% of the outstanding
shares of Forestar common stock, validly elected to receive cash
consideration in the merger.
- Holders of 3,993,435 shares of Forestar
common stock, or approximately 9.52% of the outstanding shares of
Forestar common stock, validly elected to receive stock
consideration in the merger.
- Holders of 2,619,160 shares of Forestar
common stock, or approximately 6.25% of the outstanding shares of
Forestar common stock, did not make a valid election.
In accordance with the proration and adjustment procedures of
the merger agreement, because cash elections were made with respect
to more than 75% of the shares of Forestar common stock outstanding
immediately prior to the completion of the merger and stock
elections were made with respect to less than 25% of the shares of
Forestar common stock outstanding immediately prior to the
completion of the merger:
- Forestar stockholders that validly
elected to receive stock consideration in the merger will receive,
for each share of Forestar common stock for which such election was
made, one new share of Forestar common stock;
- Forestar stockholders that did not make
a valid election will receive, for each share of Forestar common
stock held by such stockholder, one new share of Forestar common
stock; and
- Forestar stockholders that validly
elected to receive cash consideration in the merger will receive,
for each share of Forestar common stock for which such election was
made, a combination of cash consideration and stock consideration
based on a final proration factor of 0.89030037. As a result,
approximately 89.03% of the shares held by cash-electing
stockholders will be exchanged for an amount in cash equal to
$17.75 and approximately 10.97% of the shares held by cash-electing
stockholders will be exchanged for one new share of Forestar common
stock.
Forestar stockholders who have questions regarding their
individual election results should contact D. F. King &
Co., Inc., the information agent, toll free at (800) 290-6431.
Banks and brokers may call (212) 269-5550.
About D.R. Horton, Inc.
D.R. Horton, Inc., America’s Builder, has been the largest
homebuilder by volume in the United States for fifteen consecutive
years. Founded in 1978 in Fort Worth, Texas, D.R. Horton has
operations in 79 markets in 26 states across the United States and
closed 44,833 homes in the twelve-month period ended June 30, 2017.
The Company is engaged in the construction and sale of high-quality
homes through its diverse brand portfolio that includes
D.R. Horton, Emerald Homes, Express Homes and Freedom Homes
ranging from $100,000 to over $1,000,000. D.R. Horton also
provides mortgage financing and title services for homebuyers
through its mortgage and title subsidiaries.
About Forestar Group Inc.
Forestar Group Inc. is a residential and real estate development
company with operations in 14 markets in 10 states, where it owns,
directly or through joint ventures, interests in 48 residential and
mixed-use projects. As of October 5, 2017, Forestar is a
majority-owned subsidiary of D.R. Horton, Inc., the largest
homebuilder by volume in the United States for fifteen consecutive
years.
Forward-Looking Statements
Portions of this document may constitute “forward-looking
statements” as defined by the Private Securities Litigation Reform
Act of 1995. Although D.R. Horton and Forestar believe any such
statements are based on reasonable assumptions, there is no
assurance that actual outcomes will not be materially different.
All forward-looking statements are based upon information available
to D.R. Horton and Forestar on the date this release was issued.
Neither D.R. Horton nor Forestar undertake any obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. Some
forward-looking statements discuss D.R. Horton’s and Forestar’s
plans, strategies and intentions. They use words such as “expects,”
“may,” “will,” “believes,” “should,” “would,” “could,”
“approximately,” “anticipates,” “estimates,” “targets,” “intends,”
“likely,” “projects,” “positioned,” “strategy,” “future,” and
“plans.” In addition, these words may use the positive or negative
or other variations of those terms. Forward-looking statements also
include all other statements in this press release that are not
historical facts.
Factors that may cause the actual results to be materially
different from the future results expressed by the forward-looking
statements include, but are not limited to: the transaction
establishes a strategic relationship between Forestar and D.R.
Horton for the supply of developed lots, as an extension of D.R.
Horton’s strategy of increasing its optioned land and lot position
to enhance operational efficiency and returns and that D.R.
Horton’s position as Forestar’s controlling stockholder will also
allow D.R. Horton to guide the strategic direction, growth and
operational execution to increase the future value potential of
Forestar. Additional information about issues that could lead to
material changes in performance is contained in D.R. Horton’s and
Forestar’s respective annual reports on Form 10-K and their
respective most recent quarterly reports on Form 10-Q, all of which
are filed with the Securities and Exchange Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20171005006360/en/
D.R. HortonJessica L. Hansen, 817-390-8195Vice President of
Investor Relationsjlhansen@drhorton.comorForestar GroupCharles D.
Jehl, 512-433-5229Chief Financial
Officerchuckjehl@forestargroup.com
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