AUSTIN, Texas--(BUSINESS WIRE)--Apr. 13, 2017--
Forestar Group Inc. (“Forestar” or the “Company”) (NYSE: FOR) today
announced that it has entered into a definitive merger agreement (the
“Merger Agreement”) with affiliates of Starwood Capital Group
(“Starwood”) under which Starwood will acquire all of the outstanding
shares of common stock of the Company for $14.25 per share in cash. The
total transaction equity value is approximately $605 million.
The transaction price of $14.25 per share represents an 8.2% premium to
the 90-day volume weighted average price of common stock of the Company.
“Over the past 18 months Forestar has significantly reduced costs and
outstanding debt, exited non-core assets and focused on its core
community development business. While executing these key initiatives,
the Board and management have been evaluating longer term strategic
alternatives,” said James A. Rubright, Chairman of the Board. “After
conducting a thorough review assisted by highly experienced financial
and legal advisors, the Board believes that engaging in the transaction
with Starwood is the best option to maximize stockholder value.”
The Board of Directors of the Company has unanimously approved the
merger agreement and has recommended approval of the merger by
Forestar’s stockholders. The transaction is expected to close in the
third quarter of 2017 and is contingent on the approval of Forestar’s
stockholders, and is subject to the satisfaction or waiver of certain
other closing conditions. The transaction is not subject to a financing
JMP Securities LLC is acting as financial advisor to the Company, with
Skadden, Arps, Slate, Meagher & Flom LLP acting as legal advisor.
Kirkland & Ellis LLP is acting as legal advisor to Starwood.
First Quarter 2017 Financial Results
In light of today's announcement, the Company will not issue an earnings
release for its first quarter 2017 or hold a conference call for
analysts and investors to discuss its first quarter 2017 financial
About Forestar Group
Forestar is a residential and mixed-use real estate development company.
At year-end 2016, we own directly or through ventures interests in 50
residential and mixed-use projects comprised of approximately 4,600
acres of real estate located in 10 states and 14 markets. In addition,
we own interests in various other assets that have been identified as
non-core that the company is divesting opportunistically over time. At
year-end 2016, our remaining non-core assets principally include over
523,000 net acres of owned mineral assets principally located in Texas,
Louisiana, Georgia and Alabama, 19,000 acres of timberland and
undeveloped land (including mitigation banking), four multifamily assets
and approximately 20,000 acres of groundwater leases in central Texas.
On February 17, 2017, we sold our owned mineral assets for $85.6
million. Forestar operates in three business segments: real estate,
mineral resources and other. Forestar’s address on the World Wide Web is www.forestargroup.com.
About Starwood Capital Group
Starwood Capital Group is a private alternative investment firm with a
core focus on global real estate, energy infrastructure and oil & gas.
The Firm and its affiliates maintain 10 offices in four countries around
the world, and currently have more than 2,200 employees. Starwood
Capital Group has raised over $40 billion of equity capital since its
inception in 1991, and currently manages more than $51 billion in
assets. The Firm has invested in virtually every category of real estate
on a global basis, opportunistically shifting asset classes, geographies
and positions in the capital stack as it perceives risk/reward dynamics
to be evolving. Over the past 26 years, Starwood Capital Group and its
affiliates have successfully executed an investment strategy that
involves building enterprises in both the private and public markets.
Additional information can be found at starwoodcapital.com.
Cautionary Statement Regarding Forward Looking Statements
This document includes “forward-looking statements” within the meaning
of the securities laws. The words “will,” “expect,” “believe,” “future”
and similar expressions are intended to identify information that is not
historical in nature.
This document contains forward-looking statements relating to the
proposed transaction between Forestar and Starwood. All statements,
other than historical facts, including statements regarding the expected
timing of the closing of the transaction; the ability of the parties to
complete the transaction considering the various closing conditions; the
competitive ability and position of Starwood following completion of the
proposed transaction; and any assumptions underlying any of the
foregoing, are forward-looking statements. Such statements are based
upon current plans, estimates and expectations that are subject to
risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated or
anticipated by such forward-looking statements. The inclusion of such
statements should not be regarded as a representation that such plans,
estimates or expectations will be achieved. You should not place undue
reliance on such statements. Important factors that could cause actual
results to differ materially from such plans, estimates or expectations
include, among others, that (1) one or more closing conditions to the
transaction may not be satisfied or waived, on a timely basis or at all,
including that the required approval by the shareholders of Forestar may
not be obtained; (2) there may be a material adverse change of Forestar
or the business of Forestar may suffer as a result of uncertainty
surrounding the transaction; (3) the transaction may involve unexpected
costs, liabilities or delays; (4) legal proceedings may be initiated
related to the transaction; (5) changes in economic conditions,
political conditions, changes in federal or state laws or regulation may
occur; and (6) other risk factors as detailed from time to time in
Forestar’s reports filed with the Securities and Exchange Commission
(the “SEC”), including Forestar’s Annual Report on Form 10-K for the
year ended December 31, 2016 which is available on the SEC’s Web site (www.sec.gov).
There can be no assurance that the merger will be completed, or if it is
completed, that it will close within the anticipated time period or that
the expected benefits of the merger will be realized.
Neither Forestar nor Starwood undertakes any obligation to update any
forward-looking statement to reflect events or circumstances after the
date on which the statement is made or to reflect the occurrence of
Additional Information and Where to Find It
In connection with the proposed merger transaction, Forestar intends to
file relevant materials with the SEC, including a preliminary proxy
statement on Schedule 14A. Following the filing of the definitive proxy
statement with the SEC, Forestar will mail the definitive proxy
statement and a proxy card to each stockholder entitled to vote at the
special meeting relating to the proposed merger. INVESTORS ARE URGED TO
READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the
proxy statement, as well as other filings containing information about
Forestar, free of charge, from the SEC’s Web site (www.sec.gov).
Investors may also obtain Forestar’s SEC filings in connection with the
transaction, free of charge, from Forestar’s Web site (www.Forestargroup.com)
under the link “Investor Relations” and then under the link “Financial
and SEC Reporting” and then under the tab “SEC Filings,” or by directing
a request to Forestar, Charles D. Jehl, Chief Financial Officer.
Participants in the Merger Solicitation
The directors, executive officers and employees of Forestar and other
persons may be deemed to be participants in the solicitation of proxies
in respect of the transaction. Information regarding Forestar’s
directors and executive officers is available in its definitive proxy
statement for its 2017 annual meeting of stockholders filed with the SEC
on March 28, 2017. This document can be obtained free of charge from the
sources indicated above. Other information regarding the interests of
the participants in the proxy solicitation will be included in the proxy
statement when it becomes available. This communication shall not
constitute an offer to sell or the solicitation of an offer to sell or
the solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No
offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as
View source version on businesswire.com: http://www.businesswire.com/news/home/20170413006269/en/
Source: Forestar Group Inc.
Forestar Group Inc.
Charles D. Jehl, 512-433-5229