Forestar Determines Proposal From D.R. Horton Constitutes 'Superior Proposal'

(RTTNews) - Forestar Group Inc. (FOR) announced that it received a revised binding proposal from D.R. Horton Inc. (DHI) to acquire 75% of the outstanding shares of Forestar common stock for $17.75 per share in cash (an increase from D.R. Horton's previous offer of $16.25 in cash per share to acquire 75% of the outstanding shares of Forestar common stock) and that its board has unanimously determined that the revised proposal constitutes a "Superior Proposal," as defined in Forestar's amended merger agreement with Starwood Capital Group.

Under the terms of D.R. Horton's revised proposal, D.R. Horton would acquire 75% of the outstanding shares of Forestar common stock for $17.75 per share in cash and Forestar and D.R. Horton would enter into a master supply agreement establishing a strategic relationship between Forestar and D.R. Horton for the supply of developed lots and a stockholder's agreement.

On June 23, 2017, Forestar notified Starwood that Forestar had received the revised binding proposal from D.R. Horton and that Forestar's board of directors has determined that D.R. Horton's revised proposal constitutes a "Superior Proposal" and that Forestar's board of directors intends to terminate the amended merger agreement with Starwood to enter into a definitive, written agreement with respect to D.R. Horton's revised proposal.

As per the amended merger agreement with Starwood, Forestar will discuss and negotiate with Starwood in good faith (to the extent requested by Starwood) until the end of the business day on June 28, 2017 such adjustments in the terms and conditions of the merger agreement with Starwood as would permit the Forestar board of directors not to terminate the amended merger agreement with Starwood. Subject to limited exceptions, D.R. Horton's revised offer is irrevocable until 1:00 p.m. on June 30, 2017.

Forestar also announced today that it has also entered into a second amendment to its merger agreement with Starwood to increase the merger consideration to $16.00 per share in cash. Forestar previously announced that it had entered into a merger agreement with Starwood on April 13, 2017, as amended on June 21, 2017, pursuant to which Starwood would acquire all of the outstanding shares of Forestar common stock for $15.50 per share in cash. Other than the increase in the merger consideration to $16.00 per share in cash, all other terms and conditions in the Starwood merger agreement remain unchanged.

Forestar remains subject to the amended merger agreement with Starwood. Forestar said its board is not modifying, withdrawing, amending or qualifying its recommendation in favor of the amended merger agreement with Starwood and the merger contemplated thereby, or proposing to do so, and is not making any recommendation with respect to the revised D.R. Horton proposal.