According to Del Webb CEO LeRoy Hanneman, the $30 per share offer for Del Webb, though $2 more than the current price, was "insufficient." Hanneman noted that all home builder stocks are currently undervalued, and further noted that the company is poised to experience a huge upsurge in sales and profitability as more Americans than ever begin joining the 55-plus demographic.
There are signs, however, that J.F. Shea will continue to pursue Del Webb. Chief among them is its suggestion that Shea Homes’ president and CEO Roy Humphreys and Rick Andreen, active adult division president, would step down from their positions to be eligible for seats on Del Webb’s board.
"We remain hopeful that Del Webb’s management and board of directors will meet with us to discuss mutually beneficial ways in which we can combine our companies," said Shea chairman John F. Shea. "We stand by our offer and continue to be interested in good faith negotiations."
Shea also confirmed that it has been seeking discussions with Del Webb for many months. The only reason the give-and-take was disclosed arose out of Del Webb’s obligation to announce the slate of candidates offered by Shea in advance of publishing shareholder proxy statements.
At present Shea owns less than 5% of Del Webb’s stock, yet "Shea is a real player," says Sam Lieber, portfolio manager for Alpine Asset Management. "It has a conservative balance sheet, so this proposed transaction is interesting."
