William Lyon Raises $217.5 Million Pricing Shares Above Range
Stock Chart for William Lyon Homes (LWHS)
William Lyon Homes (LWHS), a builder that emerged from bankruptcy last year, raised $217.5 million in a public stock offering that priced above the marketed range.
The Newport Beach, California-based builder, which has traded over the counter, and an existing stockholder sold 8.7 million shares for $25 apiece, according to data compiled by Bloomberg, after offering them for $22 to $24 each.
William Lyon joins at least two U.S. homebuilders that conducted public offerings this year as investors seek to capitalize on the housing-market recovery. New-home demand has been rising as buyers seeking to take advantage of low mortgage rates find a tight supply of existing properties for sale.
“William Lyon is located in several markets that are growing swiftly,” Megan McGrath, an analyst with MKM Partners LLC in Stamford, Connecticut, wrote in a note yesterday before the pricing. “However, its locations combined with its long land supply in those areas -- we estimate 16 years of supply in Arizona -- creates longer-term risk, in our view, if sales pace in its chosen markets begins to ease.”
McGrath, who hasn’t rated William Lyon, estimates it will have earnings per share of 44 cents for fiscal 2013 as the number of homes sold increases 45 percent and orders grow 21 percent from the previous year. The company had a net loss of $3.5 million, or 3 cents a share, for the quarter ended March 31, according to a May 3 filing.
The company’s backers include Paulson & Co., the firm run by John Paulson, who earned $15 billion in 2007 betting against subprime mortgages; Luxor Capital Group LP, a New York-based investment manager; and Thomas Barrack Jr.’s Colony Capital LLC, which lent $206 million to William Lyon before its bankruptcy. Luxor is offering about 2.2 million shares in the sale and will trim its stake to 30 percent from 47 percent. Paulson’s stake will decrease to 11 percent from 14 percent, and Colony’s stake will drop to 3.9 percent from 5 percent.
William Lyon had a net loss of $11.6 million on revenue of $372.8 million from Feb. 25, 2012, when it emerged from bankruptcy, to Dec. 31, according to a regulatory filing. The company sold 883 homes for an average price of $277,000 at communities in California, Arizona, Nevada and Colorado.
The stock sale was led by Credit Suisse Group AG and Citigroup Inc. The shares will be listed on the New York Stock Exchange under the symbol WLH.
Tri Pointe Homes Inc., an Irvine, California-based builder backed by Barry Sternlicht and co-founded by former William Lyon executives Doug Bauer, Thomas Mitchell and Michael Grubbs, raised $267.6 million in a January IPO, including the overallotment option.
Taylor Morrison Home Corp., based in Scottsdale, Arizona and backed by Howard Marks’ Oaktree Capital Group LLC and David Bonderman’s TPG Capital, raised $722.9 million in an April IPO, including the overallotment option.
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