Dream Finders Homes went public with its $704 million all-cash bid for Beazer Homes USA on Monday, sending BZH stock surging as much as 31% in premarket trading to $24.50.
The offer of $25.75 per share carries a roughly 40% premium to BZH’s closing price of $18.35 on May 5 — the day Dream Finders first submitted the proposal to Beazer’s board.
This is not Dream Finders’ first attempt. The company initially approached Beazer in February with a $28.50-a-share proposal, followed by a $29-a-share bid in March. Both went nowhere.
The current bid is lower than both prior offers. Dream Finders attributed the reduction to a 13% drop in Beazer’s stock price since its last proposal.
Dream Finders CEO Patrick Zalupski didn’t hold back in his public statement Monday. “We are concerned that if Beazer continues to operate on a standalone basis, the company will further erode shareholder value,” he said.
He also noted that the decision to go public was deliberate. “While we would have preferred to reach an agreement privately, we are making our interest public for the benefit of all Beazer shareholders,” Zalupski added.
The timing is pointed. Dream Finders flagged that its bid comes after Beazer posted a second consecutive quarterly loss, along with a sharp drop in adjusted EBITDA.
Dream Finders says the money is there. Goldman Sachs and Bank of America have each provided highly confident letters stating that financing for the transaction can be arranged in the capital markets.
Kennedy Lewis has also issued a highly confident letter related to land bank financing connected to the deal.
Millrose Properties said it would provide land banking capital to support the acquisition. It plans to acquire land currently owned by Beazer, which it says would let Dream Finders grow in a capital-efficient way while keeping balance sheet flexibility intact.
Millrose acknowledged the deal would temporarily push its leverage above its target range, but said it would work that down through equity issuance or operating cash flows.
Dream Finders argues the combination makes geographic sense. The two companies have “highly complementary footprints and product strategies,” Zalupski said.
If the deal closes, the combined entity would become the seventh-largest homebuilder in the United States, and Dream Finders says it would increase domestic housing supply.
Dream Finders stock was up 5% in premarket trading Monday, suggesting the market sees some logic in the deal.
Beazer has yet to respond publicly to the latest proposal. DFH stock was down 0.21% as of the latest print.
The post Beazer Homes (BZH) Stock Surges 24% on $704M Dream Finders Takeover Bid appeared first on CoinCentral.
