Lennar buys CalAtlantic to become largest USA homebuilder

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 to buy CalAtlantic in $9.3bn housebuilder deal

Current CalAtlantic shareholders will receive an 0.885 share of Lennar Class A common stock, which was priced at $51.34 per share on the New York Stock Exchange on October 27.

Now the stock price is moving 20.86% off from the highest level of twelve months and +46.22% above from twelve months low. (NYSE:CAA). At the time of writing, the First Call consensus price target for the company is $40.25.

Based on current stock levels, CalAtlantic Group, Inc. shares are trading 20.81% off of the 50-day high and 46.16% away from the 50-day low.

Shares of CalAtlantic were up over 9% in early Monday premarket trading following the release of the news. The 12-month price target is $39.60 with one analyst rating the company a strong buy, five brokerages rating the company a buy, seven equity analysts rating the company a hold, one broker rating the stock a underperform, and finally 0 brokers rating the stock a sell. Prudential Financial Inc. now owns 45,137 shares of the construction company's stock valued at $1,690,000 after buying an additional 2,210 shares during the last quarter.

Under this just announced deal, each CalAtlantic share of stock is to be exchanged at a rate of 0.885 shares of Class A Lennar common stock. The firm has a market capitalization of $3.63 billion, a P/E ratio of 10.81 and a beta of 1.48. The construction company reported $0.75 earnings per share (EPS) for the quarter, missing the Thomson Reuters' consensus estimate of $0.78 by ($0.03). The operating margin is 11.20% percent and the net profit margin stands at 7.20% percent. The firm's revenue was up 4.0% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.83 earnings per share. 2 analysts recommended Overweight these shares while 1 recommended Underweight, according to FactSet data. The shares were sold at an average price of $34.51, for a total value of $621,180.00. Canada Pension Plan Investment Board purchased a new position in CalAtlantic Group in the second quarter worth $154,000. 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. Finally, Tower Research Capital LLC TRC bought a new stake in shares of CalAtlantic Group during the second quarter valued at approximately $220,000.

The deal will close in the first quarter of 2018.

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