WCI Communities surges on Lennar deal

Shares in WCI Communities surged on Thursday as the lifestyle community developer and luxury homebuilder announced a $643m merger agreement with Lennar Corporation.

Under the terms of the agreement, Lennar will pay $23.50 in cash and stock for each WCI share outstanding. The offer price represents a premium of around 37% to WCI's closing price on Wednesday.

President and chief executive officer Keith Bass said: “Our agreement with Lennar testifies to the legacy and quality of our brand, the attractiveness of our homes and communities, and the talent of our team members.

“WCI Communities homebuyers and homeowners can expect a smooth transition and the continuation of the top-tier service they have come to expect from WCI."

Bass said the offer “represents immediate and attractive value” for WCI’s stockholders.

In addition, the agreement includes a 35-day 'go-shop' provision that will allow WCI to seek out potentially superior proposals to maximise value for shareholders.

The transaction would include a portfolio of owned or controlled land totaling approximately 14,200 home sites, located in most of coastal Florida's highest growth and largest markets.

WCI shareholders will vote on the deal in December or January, and if it is approved, the deal is expected to close shortly after that, the company said.

At 1210 BST, WCI shares were up 37% to $23.50 in pre-market trade.