Pulte Homes to Buy Out Centex
$3.1 Billion Merger

This is BIG. The top two builders. WOW
I used to work for Pulte Homes so I understand how big this is.

Pulte Homes has agreed to merge with Centex Corp. in a stock transaction worth $3.1 billion, including $1.8 billion of debt, the companies said Wednesday.

Under the agreement, Centex holders will get 0.975 share of Pulte common stock for each share they own. Based on Tuesday's prices, the deal values Centex shares at $10.50 each, a nearly 38% premium from Centex's $7.62 close.
When the deal is complete, Pulte shareholders will own 68% of the combined company, and Centex shareholders will own 32%, according to the companies. The newly blended company will have more than $3.4 billion in liquidity.

"Combining these two industry leaders with proud legacies into one company puts us in an excellent position to navigate through the current housing downturn, poised to accelerate our return to profitability," said Pulte President and Chief Executive Officer Richard J. Dugas, Jr. in a written statement.

The combined company will use the Pulte name, with Dugas becoming chairman, president and CEO. Centex Chairman and Chief Executive Officer Timothy Eller will be vice chairman. The new company will be based in Pulte's home of Bloomfield Hills, Mich.

Analysts applauded the merger. "It looks like it gets them (Pulte) more competitive in the first-time buyer, first time move-up segment, which is a positive for them," said Jeremy Pinchot, director of research at Monness, Crespi, Hardt & Co. "This helps counterbalance their current exposure to move-up and active adult segments, which are higher price point homes."

Source: CNNMoney.com, Catherine Clifford (0408/2009)

by Linda Bills/Catherine Clifford - 4/08/09

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Source: http://CNNMoney.com, Catherine Clifford (0408/2009)