Why Beazer Homes Stock Was Zooming Higher This Week
Key Points
Although this was rejected, Beazer revealed that there are other would-be buyers in the mix.
This is a takeover story that has been developing for months.
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The latest developments in a long-running takeover saga helped lift Beazer Homes (NYSE: BZH) stock impressively as the week flew by. According to data compiled by S&P Global Market Intelligence, the company's shares were riding nearly 11% higher week to date as of Friday before market open.
Takeover talk
The other player in that drama is peer housing construction company Dream Finders Homes (NYSE: DFH), which has been trying to get Bezer to agree to a deal since the beginning of this year. On Wednesday, it made its fourth offer public, with a bid of $32 per share for Beazer.
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Dream Finders didn't hesitate to mention that this was 24% above its previous offer, made in May. However, that bid followed a decline in Beazer's share price. Meanwhile, Dream Finders made three other bids -- $29 per share, offered in March and upgraded to $29.25 in June, and $28.50 per share in February.
On Wednesday, Beazer quickly responded to Dream Finders' latest attempt. It said that since the May bid, it had attracted interest from other potential suitors, and added that management would be willing to begin takeover talks under three conditions it set with the June bid.
Although Dream Finders' $32-per-share bid met two of those terms, the company categorically rejected the third. Beazer's follow-up stated that its board of directors believes this latest offer is not "in the best interests of shareholders."
Decisions, decisions
Investors weren't excited because Dream Finders keeps lobbing offers at Beazer. Rather, I'd say they were cheered by the fact that others are in the hunt. With more than one suitor in play, it feels very possible Beazer will have a new majority shareholder before long. I'd definitely keep monitoring developments in this story.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dream Finders Homes. The Motley Fool has a disclosure policy.
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