Lennar is buying fellow home builder CalAtlantic in $5.7-billion deal

Lennar homes are advertised for sale in San Jose Calif. Lennar Corp. will spend $643 million to acquire luxury homebuilder WCI Communities Inc. tying up two of the largest home construction companies in Florida as the U

Lennar is buying fellow home builder CalAtlantic in $5.7-billion deal

That would equate to $51.34 a share, a 27 percent premium above the stock's closing price Friday. The companies' statement didn't say what will happen with other CalAtlantic executives.

Now the stock price is moving 20.86% off from the highest level of twelve months and +46.22% above from twelve months low. The stock presently has a consensus rating of Buy and an average price target of $42.29.

CalAtlantic Group Inc (NYSE:CAA) stock was flying high today on news of a deal with Lennar Corporation (NYSE:LEN, NYSE:LEN.B).

Horton shares were broadly flat in morning trade in NY.

Miller and his family trust, which hold a 41.4 percent voting interest in Lennar, and MP CA Homes, an affiliate of MatlinPatterson Global Opportunities Partners that holds a 25.4 percent voting interest in CalAtlantic, have agreed to support the deal, the companies said. ValuEngine raised shares of CalAtlantic Group from a hold rating to a buy rating in a report on Monday, October 2nd.

CalAtlantic Group (NYSE:CAA) last announced its earnings results on Thursday, July 27th. For the quarter, shares have been noted at 15.24%. Lennar has one of the best gross margins in the industry - it improved to 22.8% in the most recent quarter, compared with CalAtlantic's 20%, which was down from the year before. During the same quarter in the previous year, the firm earned $0.83 EPS. The firm's revenue was up 166.0% on a year-over-year basis. Analysts anticipate that CalAtlantic Group will post $3.40 EPS for the current fiscal year. The shares were sold at an average price of $36.00, for a total transaction of $613,188.00. Following the completion of the sale, the chief marketing officer now directly owns 54,396 shares in the company, valued at $1,877,205.96. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. This transaction should close during the first three months of next year. Canada Pension Plan Investment Board purchased a new position in CalAtlantic Group in the second quarter worth $154,000. Greenhaven Associates Inc. now owns 3,049,843 shares of the construction company's stock valued at $107,812,000 after buying an additional 491,510 shares during the last quarter. Finally, Tower Research Capital LLC TRC bought a new stake in shares of CalAtlantic Group during the second quarter valued at approximately $220,000.

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