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D.R. Horton to Take 75% Stake in Forestar

The merger between land developer Forestar Group and Starwood Capital, first announced in April, has been called off.

By Paul Bubny | paulbubny | Updated on June 29, 2017

Photo of residential development Arrowhead Ranch in Dripping Springs, TX, one of 55 residential and mixed-use projects in which Forestar has an interest.

AUSTIN, TX—Forestar Group’s merger with Starwood Capital Group is off, as the land development company has decided to go instead with the revised D.R. Horton Inc. (DHI) offer to acquire 75% of its stock for $17.75 per share, or approximately $560 million. Starwood Capital and Forestar initially announced a merger agreement this past April, in which Starwood would have taken Forestar private for $16 per share. DHI made its first, unsolicited bid for Forestar earlier this month, and upped the ante this past Friday.

“Aligning Forestar’s resources with D.R. Horton’s strong demand for finished lots, extensive network of markets, land acquisition and development professionals and land seller and business relationships is expected to accelerate our growth and enhance our operating efficiency and returns,” says Forestar CEO Phillip J. Weber. “By remaining a public company, Forestar expects to maintain access to capital to support the increasing scale of the business.”

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