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William Lyon Sweetens Bid for His Company

The home builder's namesake raises his offer to $100 a share to take the firm private. A panel of directors urges shareholders to accept.

April 11, 2006|Annette Haddad | Times Staff Writer

William Lyon went on the offensive Monday, bumping up his bid to buy the shares of William Lyon Homes Inc. that he doesn't already own to $100 a share from $93 originally offered last month.

The sweetened bid may be enough to finally allow Lyon, the company's chairman and chief executive, to take the Newport Beach-based home builder private. A committee of outside directors recommended Monday that shareholders accept the latest offer, after having told Lyon 10 days earlier to improve his bid.

The sweetened offer represents a 32% premium over the stock's closing price March 16, the day before Lyon announced his renewed plans to take the company private.

Lyon owns about 48% of outstanding shares and controls 24% through family trusts, according to government filings. The offer values the outstanding shares Lyon doesn't own or control at about $459 million.

The company's stock rose $2.90, or 3%, on Monday to close at $100.

Lyon, 83, a retired Air Force major general and former chief of the Air Force Reserve, has long sought to regain total control of the builder he founded with his brother half a century ago. William Lyon Homes became a public company when it merged with struggling Presley Cos. in 1999.

A year ago, Lyon offered to buy the company for $82 a share, which at the time was a 12% premium over the company's pre-bid stock price. He withdrew his bid two months later after it was rejected as inadequate by independent directors.

Shareholders have until April 21 to tender their shares at the new price, Lyon said in a statement.

Lyon also said he had reached an agreement, subject to court approval, to settle two shareholder lawsuits that had been filed in Delaware to block his tender offer. One California lawsuit is pending, he said.

One condition of settlement was the higher bid price, said Carl Stine, an attorney with Wolf Popper in New York who was involved in weekend settlement negotiations on behalf of certain shareholders. Stine had deposed Lyon and other company executives in preparation for a court hearing.

Calls to Lyon weren't returned.

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