Starwood Capital Group’s $605 million bid for Forestar Group is being challenged by a real estate investment trust.
On Monday, homebuilder D.R. Horton, a Fort Worth, Texas-based homebuilding REIT, made an unsolicited bid to buy 75 percent of Forestar’s outstanding stock for cash in a deal valued at $680 million. In an April deal approved by Forestar’s board of directors, Greenwich, Connecticut-based Starwood proposed purchasing the REIT for $605 million.
Forestar, which develops for-sale housing communities, owned 49 residential and mixed-use assets in 10 states, along with non-core holdings it is planning to sell, according to its first-quarter earnings report. The REIT’s board of directors still recommends that shareholders vote for Starwood’s offer at a vote previously scheduled for July 7.
If shareholders accept D.R. Horton’s bid, the REIT will continue to trade publicly, according to the proposal. Forestar would also have a new executive chairman, Donald Tomnitz, who was the chief executive of D.R. Horton from 1998 to 2014 before he retired.
“The Forestar proposal is a continuation of D.R. Horton’s stated strategy of expanding relationships with land developers across the country and growing the optioned portion of its land and lot position to enhance operational efficiency and returns,” Donald Horton, the firm’s chairman of the board, said in Monday’s statement.
Neither Forestar nor D.R. Horton could be reached for comment, and a spokesman for Starwood declined to comment.
Starwood manages $52 billion, according to its website. The firm is currently raising capital for both a new core-plus platform and its latest opportunistic fund, Starwood Opportunity Fund XI Global. It was unclear at press time through which vehicle Starwood would acquire Forestar.