D.R. Horton Inc.’s $560 Million Acquisition of Forestar Group


Moelis & Company is serving as financial advisor to D.R. Horton in connection with this proposal, and Gibson, Dunn & Crutcher LLP is serving as legal counsel. Skadden advised Forestar Group Inc. on the deal

D.R. Horton, Inc., America’s Builder, has submitted a proposal to the Board of Directors of Forestar Group Inc. to acquire 75% of the currently outstanding shares of Forestar for $16.25 per share in cash. The $16.25 per share value represents a 14% premium over the purchase price to be paid to the Forestar stockholders pursuant to the existing merger agreement between Forestar and affiliates of Starwood Capital Group.

Under the proposed transaction, Forestar would remain a public company to ensure continued access to capital to support the increasing scale of the business. D.R. Horton believes continuing Forestar stockholders will have the opportunity to participate in significant value creation through a strategic relationship with D.R. Horton that would help Forestar grow organically into the leading residential land development company in the United States, selling developed residential lots to D.R. Horton and other homebuilders. Forestar would be led by new executive chairman Donald Tomnitz, who served as CEO of D.R. Horton for over 15 years, and a strong management team that is expected to include Forestar’s experienced professionals.

The Skadden team includes: M&A partner Jeremy London (Picture) (Washington, D.C.), counsel Erik Elsea (Washington, D.C.) and associate John Hamlett; Tax partner Stuart Finkelstein (New York); Corporate Finance partner Michael Zeidel (New York) and counsel Michael Hong (New York); Banking partner Stephanie Teicher (New York); Real Estate partner Neil Rock (New York) and counsel Peter Mair (New York); Litigation partner Robert Saunders (Wilmington) and counsel Ronald Brown (Wilmington); Executive Compensation and Benefits counsel Michael Bergmann (Washington, D.C.); and Antitrust and Competition counsel Rita Sinkfield Belin (New York).

Involved fees earner: Jeremy London – Skadden Arps Slate Meager & Flom; Erik Elsea – Skadden Arps Slate Meager & Flom; John Hamlett – Skadden Arps Slate Meager & Flom; Stuart Finkelstein – Skadden Arps Slate Meager & Flom; Michael Zeidel – Skadden Arps Slate Meager & Flom; Michael Hong – Skadden Arps Slate Meager & Flom; Stephanie Teicher – Skadden Arps Slate Meager & Flom; Neil Rock – Skadden Arps Slate Meager & Flom; Peter Mair – Skadden Arps Slate Meager & Flom; Robert Saunders – Skadden Arps Slate Meager & Flom; Ronald Brown – Skadden Arps Slate Meager & Flom; Michael Bergmann – Skadden Arps Slate Meager & Flom; Rita Sinkfield Belin – Skadden Arps Slate Meager & Flom;

Law Firms: Skadden Arps Slate Meager & Flom;

Clients: Forestar Group Inc.;

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Author: Ambrogio Visconti