Taylor Morrison Jumps After IPO Prices at Top of Range

Taylor Morrison Home Corp., the builder majority-owned by TPG Capital and Oaktree Capital Management LP, climbed in New York trading after raising 20 percent more than it first sought in an initial public offering.

The stock rose 4.7 percent to close at $23.04. The Scottsdale, Arizona-based company yesterday raised $628.6 million selling 28.6 million shares for $22 each, according to a statement, after offering 23.8 million shares for $20 to $22.

“We’ve put the business in a very good position to be really opportunistic,” Taylor Morrison Chief Executive Officer Sheryl Palmer said in a telephone interview today from New York. “From an offering standpoint, we’re really in the right place at the right time.”

The IPO benefited from a recovery in new-home sales following the worst housing crash since the Great Depression, as well as from stock prices that have risen to all-time highs this year. The offering opens the way for Fort Worth, Texas-based TPG and Los Angeles-based Oaktree to exit Taylor Morrison after leading a $1.2 billion buyout from U.K. parent Taylor Wimpey Plc in 2011.

The purchase included a $620.3 million equity investment that was later expanded to $770.3 million. The midpoint of the IPO price range valued that stake at $2.33 billion, data compiled by Bloomberg show.

Share Purchases

Taylor Morrison planned to offer a 19 percent stake in the IPO, filings showed. The company will use $386.6 million of its proceeds from the enlarged offering, together with cash on hand, to buy shares back from existing owners, according to yesterday’s statement. TPG and Oaktree were each set to own 39 percent of the company post-IPO, regulatory filings before the offering showed.

Demand for new houses has come back as consumer confidence stabilizes, unemployment declines and buyers seek to take advantage of low mortgage rates while facing a diminished supply of existing properties on the market, Palmer said. New homes sold at an annual pace of 411,000 in February, up 12 percent from a year earlier, Commerce Department figures show.

Taylor Morrison’s IPO is the second by a U.S. homebuilder this year. Tri Pointe Homes Inc., an Irvine, California-based builder that’s 38 percent owned by Barry Sternlicht’s Starwood Capital Group LLC, raised $267.6 million in January.

William Lyon Homes -- whose primary shareholders include Luxor Capital Group LP, Paulson & Co. and Colony Capital LLC -- applied to list on the New York Stock Exchange, with plans to raise as much as $200 million in a new share offering, according to a filing yesterday. The Newport Beach, California-based builder gained 16 percent to $3.32 today in over-the-counter trading.

Credit Suisse Group AG and Citigroup Inc. led the Taylor Morrison offering. The shares are listed on the New York Stock Exchange under the symbol TMHC.

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