Homebuilder stocks are strongly higher after encouraging home sales data, and a solid quarter from Standard Pacific (SPF) yesterday afternoon. SPF +13%. LEN +7.8%. MHO +6.4%. MTH +6.3%. CTX +3.1%. PHM +3%. SPDR Homebuilders ETF (XHB) +4.3%.
Eli Broad, the billionaire who founded U.S. homebuilder KB Home (KBH), says mortgage rates need to drop below 4% (now 4.8%) to make a meaningful dent in a glut of foreclosed properties. Broad predicts Pulte Homes' (PHM) April 8 deal to buy Centex (CTX) won't be the last.
CTX (CTX) +28.6% to $9.95 after announcing it will be acquired by Pulte Homes (PHM) for about $10.50/share. PHM -0.7%. Other homebuilders are up on the news: BZH +17%. HOV +16%. LEN +9%. KBH +7%. RYL +3%.
Centex, Pulte get homey. Centex (CTX) and Pulte Homes (PHM) will merge, creating America's largest homebuilder, with Centex shareholders receiving 0.975 shares of Pulte for every Centex share they own. That amounts to $10.50 based on yesterday's close - a 32.6% premium. CTX +23% premarket to $9.37.
Shares of D.R. Horton (DHI) and Centex (CTX) under pressure after Credit Suisse downgrades homebuilders, noting buyers, "will continue to gravitate to foreclosures and bypass the new-home premium." CTX -9.8%. DHI -7.2%. LEN -5.3%. TOL -5%.
Centex (CTX): FQ3 EPS of -$5.34 misses by $2.07. Revenue of $872M (-53.4%) vs. $895M. Finishes quarter with $1.47B in cash. "We continued to move with urgency to reduce our cost structure, accelerating overhead reductions and further reducing land-related spending." Shares -2.4% AH. (PR)
Centex Corporation is a Nevada corporation. Our common stock, par value $.25 per share, began trading publicly in 1969. Our common stock is currently traded on the New York Stock Exchange, or the NYSE. As of May 8, 2009, 124,483,451 shares of our common stock were outstanding. Any reference...More