Lennar to buy CalAtlantic for $5.7B with housing sales red hot

Posted October 31, 2017

CalAtlantic's shares jumped 23 percent after the announcement of the deal, which valued its shares at $51.24 per share a premium of 27 percent to Friday's close, but Lennar's fell nearly 3 percent. The stock has been on an upward trend for over a month and has surged to a new high for the year. Barclays PLC upgraded shares of CalAtlantic Group from an "underweight" rating to an "equal weight" rating and set a $35.00 target price on the stock in a report on Tuesday, July 11th.

Having a price of $40.45, CalAtlantic Group (NYSE:CAA) traded 21.31% higher on the day. For the past 5 years, the company's revenue has grown 48.6%, while the company's earnings per share has grown 75.8%.

However the company's price to cash per share for most recent quarter stands at 20.43. Analysts giving shares a rating of 1 or 2 would be indicating a Buy. There's a maximum cash offer of $1.2 billion for this option. The construction company reported $0.75 earnings per share (EPS) for the quarter, missing the Thomson Reuters' consensus estimate of $0.78 by ($0.03).

In other CalAtlantic Group news, CMO Wendy L. Marlett sold 18,000 shares of the firm's stock in a transaction dated Thursday, September 15th.

Citi was financial adviser for Lennar while JP Morgan Securities LLC advised CalAtlantic. With an institutional ownership near 0%, it carries an earnings per share ratio of 3.59. The firm's revenue was up 166.0% on a year-over-year basis. 2 analysts recommended Overweight these shares while 1 recommended Underweight, according to FactSet data. The shares were sold at an average price of $36.00, for a total transaction of $613,188.00.

The deal will close in the first quarter of 2018. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The volume of 1.81 Million shares climbed up over an trading activity of 1.02 Million shares. Canada Pension Plan Investment Board purchased a new position in CalAtlantic Group in the second quarter worth $154,000. Finally, Tower Research Capital LLC TRC bought a new stake in shares of CalAtlantic Group during the second quarter valued at approximately $220,000.

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