Forestar Enters Into Second Amendment to Merger Agreement with Starwood
AUSTIN, Texas--(BUSINESS WIRE)--Jun. 23, 2017--
Forestar Group Inc. (“Forestar” or the “Company”) (NYSE: FOR) announced
today that it had received a revised binding proposal from D.R. Horton,
Inc. (“D.R. Horton”) to acquire 75% of the outstanding shares of
Forestar common stock for $17.75 per share in cash (an increase from
D.R. Horton’s previous offer of $16.25 in cash per share to acquire 75%
of the outstanding shares of Forestar common stock) and that its board
of directors, after consultation with its outside legal and financial
advisors, has unanimously determined that the revised proposal
constitutes a “Superior Proposal,” as defined in Forestar’s amended
merger agreement with Starwood Capital Group (“Starwood”).
Under the terms of D.R. Horton’s revised proposal, which contains
definitive documentation, D.R. Horton would acquire 75% of the
outstanding shares of Forestar common stock for $17.75 per share in cash
and Forestar and D.R. Horton would enter into a master supply agreement
establishing a strategic relationship between Forestar and D.R. Horton
for the supply of developed lots and a stockholder’s agreement. The
proposed master supply agreement and stockholder’s agreement contain
revised terms negotiated between Forestar and D.R. Horton since the
submission of D.R. Horton’s initial proposal on June 5, 2017.
On June 23, 2017, Forestar notified Starwood that Forestar had received
the revised binding proposal from D.R. Horton and that Forestar’s board
of directors has determined that D.R. Horton’s revised proposal
constitutes a “Superior Proposal” and that Forestar’s board of directors
intends to terminate the amended merger agreement with Starwood to enter
into a definitive, written agreement with respect to D.R. Horton’s
revised proposal. In accordance with the amended merger agreement with
Starwood, Forestar will discuss and negotiate with Starwood in good
faith (to the extent requested by Starwood) until the end of the
business day on June 28, 2017 such adjustments in the terms and
conditions of the merger agreement with Starwood as would permit the
Forestar board of directors not to terminate the amended merger
agreement with Starwood. Subject to limited exceptions, D.R. Horton’s
revised offer is irrevocable until 1:00 p.m. on June 30, 2017.
Forestar also announced today that it has also entered into a second
amendment to its merger agreement with Starwood to increase the merger
consideration to $16.00 per share in cash. Forestar previously announced
that it had entered into a merger agreement with Starwood on April 13,
2017, as amended on June 21, 2017, pursuant to which Starwood would
acquire all of the outstanding shares of Forestar common stock for
$15.50 per share in cash. Other than the increase in the merger
consideration to $16.00 per share in cash, all other terms and
conditions in the Starwood merger agreement remain unchanged.
Forestar remains subject to the amended merger agreement with Starwood.
Forestar’s board of directors is not modifying, withdrawing, amending or
qualifying its recommendation in favor of the amended merger agreement
with Starwood and the merger contemplated thereby, or proposing to do
so, and is not making any recommendation with respect to the revised
D.R. Horton proposal.
There is no assurance that the transactions with either Starwood or D.R.
Horton will be completed.
JMP Securities LLC is acting as financial advisor to the Company and
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor.
About Forestar Group
Forestar is a residential and mixed-use real estate development company.
At first quarter-end 2017, we own directly or through ventures interests
in 49 residential and mixed-use projects comprised of approximately
4,400 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 first quarter-end 2017, our remaining non-core assets
principally include, 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.
Forestar operates in three business segments: real estate, mineral
resources and other. Forestar’s address on the World Wide Web is www.forestargroup.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 and Forestar’s Quarterly Report on Form
10-Q for the three months ended March 31, 2017, which are 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 has filed a
definitive proxy statement with the SEC. The definitive proxy statement
has been mailed to Forestar’s stockholders. INVESTORS ARE URGED TO READ
THE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT
FORESTAR AND THE TRANSACTION. Investors are able to obtain the
definitive 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 is included in the definitive
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 amended.
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Source: Forestar Group Inc.
Investor Relations Contact:
Forestar Group Inc.
Kekst and Company
Jeremy Fielding, 212-521-4858