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Golden West Homes Studies Lyon Co. Bid

December 19, 1985|LESLIE BERKMAN | Times Staff Writer

Golden West Homes, the Santa Ana-based producer of mobile homes and factory-built housing, said a special committee of its board of directors will not make a recommendation until next month on whether to accept the William Lyon Co.'s offer to buy out its public shareholders for $9.3 million, or $3.75 a share.

Meanwhile, the offer made on Nov. 13 technically expired a week later, according to William Lyon, chairman of the Newport Beach home-building company bearing his name.

Lyon said he is still deciding whether to continue the offer. The whole matter currently is "in limbo," he said.

"It (the offer) is under advisement," said Jack Steele, chairman of a subcommittee of Golden West directors formed to determine if the offer was a "fair price." Steele added Wednesday that the subcommittee is prepared to make its recommendation, which he would not disclose, to the next meeting of the full board of directors, which may occur early next month.

Opposing Views

Stock market analysts Wednesday expressed opposing views of the viability of the proposed transaction. They agreed, however, that Golden West's estimation of the adequacy of the Lyon offer will be colored by the sudden rise in the selling price of Golden West's stock that occurred just before the announced buy-out proposal. The day before the offer was made public, Golden West shares closed at $4.50 a share, up $1.25 a share.

But since the announcement, the selling price of the Golden West stock has slipped. It was $3.62 in trading on the American Stock Exchange Wednesday, just slightly below the $3.75 offer.

"If the $3.75 had been acceptable to the company, I think we would have heard an announcement by now," said David V. Jackson of the Los Angeles investment firm of Morgan, Olmstead, Kennedy & Gardner. Despite the uncertainty of the transaction, Jackson said he still is recommending investment in Golden West. He said that after three years of net losses, Golden West has trimmed its overhead and is ready to move into the black.

Kenneth Campbell, president of Audit Investments, a New York real estate investment adviser, was not ready to write off the Lyon proposal because of Golden West's delay in responding. "As a practical matter, you can't respond that fast," he said, adding, "I wouldn't assume the deal is dead unless they say it's dead."

Campbell said he believed that Lyon's involvement in Golden West, in which he previously acquired a 27.9% interest, is a "major positive" for the small, struggling mobile home manufacturer.

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