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Who will buy? Weyerhaeuser and Shapell Stakes Grow Steeper
John McManus / BUILDER / August 22, 2013
Although Fed taper angst and a couple of underwhelming late entrants in home building’s initial public offering beauty pageant have cast a pall over equity investor enthusiasm in the waning days of August, all is not quiet in home building’s dog days landscape.
Bidders are jockeying for advantage on two game-changing home building crown jewels–the five-piece Weyerhaeuser portfolio of home builders with a reported total of 27,000 lots and California-based Shapell Homes, with an estimated California lot pipeline of 5,000–as the race to lock in land supply for housing’s continued recovery in the coming 12 to 36 months heightens the stakes.
We’re hearing price tags of upwards of $3 billion for the Weyerhaeuser group, and from $1 billion to $1.5 billion for the Shapell package.
Top line, the competition to buy the Weyerhaeuser five-operator package and Shapell’s Golden State goldmine will play out as a classic smack-down between strategic behemoths and global financial private equity and hedge fund giants.
Since the sellers in both cases–Weyerhaeuser’s deal is being fronted by Citigroup Inc. and Morgan Stanley and Shapell is working with Lazard Freres & Co.–are radio silent and locked into confidentiality clauses on the bidding, BUILDER PULSE will take a stab educated conjecture in identifying potential most-likely candidates among strategic and financial players for the two mega-deals.
First let’s have a look at what the Weyerhaeuser group is all about, and what it would mean for a strategic acquirer. Of interest is the question of why the group may only be available as a package. Broken up into pieces, we believe, would probably fetch an even more impressive roster of potential bidders. Trendmaker Homes, for instance, would attract interest from a number of privately held Texas-based builders, as would any one of the other Weyerhaeuser regional powerhouses.