AUSTIN, Texas--(BUSINESS WIRE)--Jun. 29, 2017--
Forestar Group Inc. (“Forestar” or the “Company”) (NYSE: FOR) announced
today that it has entered into a definitive agreement with D.R. Horton,
Inc. (“D.R. Horton”) (NYSE: DHI) under which D.R. Horton will acquire
75% of the outstanding shares of Forestar common stock for $17.75 per
share in cash. As part of the transaction, Forestar and D.R. Horton will
enter into a stockholder’s agreement and a master supply agreement that
establishes a strategic relationship between Forestar and D.R. Horton
for the supply of developed lots. A release providing further details
about the definitive agreement and plans for the relationship between
Forestar and D.R. Horton was issued separately today.
Forestar also announced today that it has terminated its previously
announced merger agreement with Starwood Capital Group (“Starwood”).
Accordingly, Forestar is also announcing the cancellation of its special
meeting of stockholders which was scheduled to be held on July 7, 2017.
“Forestar is pleased to announce this transformational agreement with
D.R. Horton, America’s largest homebuilder. This transaction is expected
to create additional value for shareholders of both companies, and to
enable Forestar to become a leading national land developer,” said
Phillip J. Weber, Chief Executive Officer of Forestar. “Aligning
Forestar’s resources with D.R. Horton’s strong demand for finished lots,
extensive network of markets, land acquisition and development
professionals and land seller and business relationships is expected to
accelerate our growth and enhance our operating efficiency and returns.
By remaining a public company, Forestar expects to maintain access to
capital to support the increasing scale of the business.”
Forestar previously announced that it had entered into a merger
agreement with Starwood on April 13, 2017, which was subsequently
amended, pursuant to which Starwood would acquire all of the outstanding
shares of Forestar common stock for $16.00 per share in cash. On June 5,
2017, Forestar announced that it had received an unsolicited, nonbinding
proposal from D.R. Horton to acquire 75% of the outstanding shares of
Forestar common stock for $16.25 in cash. On June 8, 2017, Forestar
announced that its board of directors, after consultation with its
outside legal and financial advisors, had determined that the D.R.
Horton proposal could reasonably be expected to lead to a “Superior
Proposal,” as defined in the Starwood merger agreement.
On June 23, 2017, Forestar announced that it had received a revised
binding proposal from D.R. Horton to acquire 75% of the outstanding
shares of Forestar common stock for $17.75 per share in cash and that
its board of directors, after consultation with its outside legal and
financial advisors, had unanimously determined that the revised D.R.
Horton proposal constituted a “Superior Proposal,” as defined in the
amended Starwood merger agreement. After such determination by the
Forestar board of directors, Starwood did not make any proposal to
adjust the terms and conditions of the amended Starwood merger
agreement. In accordance with the amended Starwood merger agreement,
prior to the termination of the amended Starwood merger agreement,
Forestar paid Starwood a $20 million termination fee.
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.
Portions of this document may constitute “forward-looking statements” as
defined by the Private Securities Litigation Reform Act of 1995.
Although Forestar believes 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 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
in this press release include, but are not limited to, statements
regarding the expected effects on D.R. Horton and Forestar of the
proposed Merger, and Master Supply Agreement, the anticipated timing and
benefits of the Merger and related transactions, including future
financial and operating results, and D.R. Horton’s and Forestar’s plans,
objectives, expectations and intentions. Forward-looking statements also
include all other statements in this press release that are not
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: Forestar’s ability to obtain requisite
approval from its stockholders, D.R. Horton’s and Forestar’s ability to
satisfy the conditions to closing of the proposed Merger; other risks
related to the completion of the proposed Merger and actions related
thereto; there may be a material adverse change of Forestar or the
business of Forestar may suffer as a result of uncertainty surrounding
the transaction; the transaction may involve unexpected costs,
liabilities or delays; legal proceedings may be initiated related to the
transaction; changes in federal or state laws or regulation may occur;
the cyclical nature of the homebuilding industry and changes in
economic, real estate and other conditions; constriction of the credit
markets, which could limit D.R. Horton’s and Forestar’s ability to
access capital and increase their respective costs of capital;
reductions in the availability of mortgage financing provided by
government agencies, changes in government financing programs, a
decrease in D.R. Horton’s ability to sell mortgage loans on attractive
terms or an increase in mortgage interest rates; the risks associated
with Forestar’s and D.R. Horton’s land and lot inventory; home warranty
and construction defect claims; the effects of a health and safety
incident; the effects of negative publicity; supply shortages and other
risks of acquiring land, building materials and skilled labor; the
impact of an inflationary, deflationary or higher interest rate
environment; reductions in the availability of performance bonds;
increases in the costs of owning a home; the effects of governmental
regulations and environmental matters on our homebuilding operations;
the effects of governmental regulations on our financial services
operations; our significant debt and our ability to comply with related
debt covenants, restrictions and limitations; competitive conditions
within the homebuilding and financial services industries; D.R. Horton’s
and Forestar’s ability to execute our growth strategies, acquisitions or
investments successfully; the effects of the loss of key personnel; and
information technology failures and data security breaches. 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 (the “SEC”). 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.
In connection with the completion of D.R. Horton’s proposed transaction
with Forestar, Forestar will file a registration statement with the SEC
on Form S-4 that will include a proxy statement/prospectus to be
distributed to Forestar stockholders. Forestar will mail the proxy
statement/prospectus and a proxy card to each stockholder entitled to
vote at the special meeting relating to the proposed Merger. SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT
BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The
registration statement, proxy statement/prospectus and other relevant
documents will be available at no cost at the SEC’s website at http://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.
D.R. Horton, Forestar and their respective directors and certain of
their executive officers may be deemed to be participants in any
solicitation in connection with the proposed Merger. Information
regarding D.R. Horton’s directors and executive officers is available in
D.R. Horton’s proxy statement for the 2017 Annual Meeting of
Stockholders, filed with the SEC on December 9, 2016. Information
regarding Forestar’s directors and executive officers is available in
Forestar’s proxy statement for the 2017 Annual Meeting of Stockholders,
filed with the SEC on March 28, 2017. These documents can be obtained
free of charge from the sources indicated above. Other information
regarding D.R. Horton and Forestar participants in any proxy
solicitation in connection with the proposed transaction and a
description of their direct and indirect interests, by security holdings
or otherwise, will be contained in the proxy statement/prospectus and
other relevant materials to be filed with the SEC.
This document shall not constitute 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 offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the U.S. Securities Act of 1933, as amended.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170629005635/en/
Source: Forestar Group Inc.
Forestar Group Inc.
Charles D. Jehl,
Kekst and Company
Jeremy Fielding, 212-521-4858