The board of luxury homebuilder WCI Communities said Thursday it is abandoning its attempts to sell the company after receiving no bids. It also unanimously elected activist investor Carl Icahn to the position of chairman. The company's shares shed 3.8% to close at $8.66 following the announcement. WCI will continue to pursue other strategic alternatives, including a possible rights offering. "Despite the rough road ahead, I believe in the long-term value of the company and view the WCI platform as a unique vehicle to take advantage of the current market disarray," Icahn said. In February, Icahn, who is WCI's largest shareholder, tried to oust the board of directors; a month later, he made a $22 per share offer for the company. Both moves were resisted by management. Don Ackerman, the board chairman being replaced by Icahn, rejected the bid because he believed the company could fetch a better price. "Obviously selling the company at $22 would've been a better decision than holding an $8 stock," Ackerman said on August 30. "But a lot of events took place that really impacted the entire industry and this liquidity crunch in the real estate market is really in my experience unprecedented."
Sources: Press release, MarketWatch, Reuters, Forbes, Bloomberg
Commentary: Don't Blindly Follow Carl Icahn (Or Anyone Else For That Matter) • WCI Shares Plunge After No Bid Materializes
Stocks/ETFs to watch: WCI. Competitors: LEN, PHM, TOL. ETFs: NFO
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