Standard Pacific and TOUSA's discussions regarding "a transaction" between the two home builders are moving along at a good pace, TOUSA spokesperson Jennifer Mercer said Monday, Dec. 22.

"It's in early stages, but it's moving along at a nice enough clip that both parties thought they could issue a statement," Mercer said. Standard Pacific announced the discussions on Friday, Dec 19. TOUSA did the same in similar words on Monday.

"I think we can safely say that we would hopefully have something more concrete by the end of January," said Mercer. "When I say something concrete, I mean a term sheet or something along those lines."

But, for now, Mercer said the discussions are preliminary. "There really isn't any more detail. ... "They [Standard Pacific] still need to complete portions of their own due diligence."

At the end of January, TOUSA will have been in bankruptcy under Chapter 11 for a year. At the time of its filing, TOUSA listed assets of $2.3 billion and debt of $1.8 billion.

The two companies have one big common factor--private equity firm MatlinPatterson Global Investors is invested in both. MatlinPatterson holds a large share of Standard Pacific's stock and seats on its board. At TOUSA, MatlinPatterson owns some of the company's debt.

In October, TOUSA proposed a plan for reorganization that would hand over stock and control of the reorganized company to the holders of $300 million in second lien debt, effectively wiping it out. At the time, TOUSA's CEO John Boken said he "was not at liberty" to give the name of the debt holders, only saying that, over time, they would become known.

When asked wither MatlinPatterson, was one of the second lien holders, Boken simply said: "Companies like that."

The day before announcing the talks, Standard Pacific announced Ken Campbell, a partner at MatlinPatterson, was named CEO, succeeding Jeffrey Peterson, who remains on the company's board.

After MatlinPatterson infused cash into the foundering Standard Pacific, Peterson spoke publicly several times about how MatlinPatterson's considerable war chest to purchase distressed home building assets could be deployed to grow Standard Pacific.

In the Friday announcement, Standard Pacific said: "We believe that there may be attractive land and corporate opportunities worth considering. We continuously review acquisition and other strategic opportunities, which could enhance value for our stockholders."

Standard Pacific and TOUSA share similar footprints--stretching across the southern United States. They both have a presence in Nevada, Arizona, Colorado, Texas, and Florida.

Standard Pacific, however, has a sizeable presence in California and operations in the Carolinas that TOUSA lacks, and TOUSA has a presence in the Mid-Atlantic states, including Pennsylvania, and the greater Washington area as well as Nashville, that Standard Pacific doesn't have.