LONDON (ShareCast) - (ShareCast News) - US housebuilder D.R. Horton has offered to buy 75% of real estate development company Forestar for $16.25 per share.
The price trumps the $14.25 a share offer made by Starwood, which was accepted back in April.

D.R. Horton said that under the terms of the deal, Forestar would remain a public company to ensure continued access to capital to support the increase scale of the business. Forestar would be led by new executive chairman Donald Tomnitz, who served as CEO of D.R. Horton for over 15 years.

Chairman Donald R. Horton said: "We believe that D.R. Horton is uniquely positioned to make Forestar the country's leading residential land development company. Together, we can grow Forestar into a much more significant and valuable company for all of its stockholders.

"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. We urge the Forestar board to act quickly on this proposal which is in the best interests of their stockholders."

The deal would be effected through a merger of a newly formed, wholly owned subsidiary of D.R. Horton with Forestar. There would be a cash election feature in which Forestar stockholders would have the right to elect, for each share of common stock held, either to receive $16.25 per share in cash as merger consideration, or to retain such share of the surviving entity.

At 1300 BST, Forestar shares were up 13% in pre-market trade to $16.10.

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