Lennar to buy WCI, create homebuilding powerhouse

NEW YORK (AP) – Lennar will spend $643 million to acquire Bonita Springs-based luxury homebuilder WCI Communities Inc., tying up two of the largest home construction companies in Florida as the U.S. real estate market continues to heat up.

Despite the monthly decline reported this week by the Commerce Department, construction activity has accelerated for much this year. Builders are increasingly optimistic about sales growth, a reflection of how steady job gains are leading more Americans to purchase new houses and sign leases for new apartments.

On Tuesday, Miami-based Lennar reported a 5 percent jump in third-quarter profit and its revenue continues to rise as it delivers more homes.

Deliveries climbed 7 percent to 6,779 homes, while new orders rose 8 percent to 7,018 homes. Lennar also said that there was a 3 percent increase in the average sales price of homes delivered.

The deal, for $23.50 per share, marks a 37 percent premium to WCI’s closing price Wednesday. It will be half in cash and half in Lennar stock.

The boards of both companies have approved the deal. WCI has a 35-day “go-shop” period in which it will solicit and evaluate potential alternative offers, according to The Wall Street Journal.

The deal is subject to approval by WCI stockholders. A vote is expected to occur in December or January, the Journal said.

Shares of WCI rose 41 percent in morning trading to $24.19 and Lennar shares rose 2 percent to $44.35.