Dream Finders Homes has submitted a revised proposal to the board of directors of Beazer Homes to acquire all outstanding shares of Beazer, offering $32 per share in cash.
The latest proposal is approximately 24% higher than Dream Finders’ previous public offer of $25.75, announced in May. Prior to its public proposal, Dream Finders had privately offered $28.50 in February and $29 per share in March, both of which Beazer rejected. Dream Finders subsequently increased its private proposal to $29.25 per share on June 22 before submitting its latest public bid.
According to Dream Finders, the $32-per-share offer represents a premium of approximately 70% to Beazer’s undisturbed share price of $18.77 on May 8 and a premium of 56% to Beazer’s undisturbed 30-day volume-weighted average price of $20.48 as of the same date.
Beazer Homes has consistently maintained that the offers by Dream Finders Homes continue to undervalue the company. Following correspondence between the companies on June 22, Beazer said it would be willing to enter discussions if three conditions were met:
- Dream Finders would need to submit an improved offer to its June 22 offer of $29.25 per share that was in line with the values presented by the other alternatives being considered by the Beazer board.
- Dream Finders would need to sign a customary confidentiality and “standstill” agreement.
- Dream Finders would need to drop its requirement that Beazer negotiate with it on an exclusive basis.
In a news release associated with its public proposal, Dream Finders characterized these conditions as “roadblocks” and “onerous preconditions” designed to delay engagement and impede a potential transaction.
In response, Beazer said Dream Finders met two of its three requirements, but still refused to enter into a customary confidentiality and “standstill” agreement.
“Instead, Dream Finders decided to make its latest proposal public in what can only be perceived as an attempt to pressure Beazer’s board to engage with Dream Finders under unilateral terms that Beazer’s board does not believe to be in the best interests of shareholders,” Beazer wrote in a note shared on its investor relations page.
Dream Finders, meanwhile, said it made its latest proposal public following Beazer’s “continued resistance to engage constructively” and “to offer Beazer shareholders the opportunity they deserve to evaluate this compelling proposal for themselves.”
“While we would have preferred to continue our discussions privately, Beazer’s proposed non-disclosure agreement and related restrictions go well beyond what is necessary to protect confidential information,” said Dream Finders Homes chairman and CEO Patrick Zalupski. “Taken together with Beazer’s past unwillingness to engage, these provisions raise questions about whether the board is prepared to pursue a transaction that we believe would be in the best interest of Beazer shareholders.”
In conjunction with the $32 per share all-cash offer, Dream Finders released a revised investor presentation outline the financial merits of the proposal reaffirming its commitment to a successful transaction. The presentation reiterated Dream Finders’ confidence in its ability to finance the deal and to expedite the closing of the transaction.
Beazer said it does not plan to disclose further developments “unless and until it determines that additional disclosure is appropriate or required by applicable law.”
