WCI Slides After Rejecting Bid [South Florida]
When billionaire activist Carl Icahn proposed a $22-a-share buyout of WCI Communities Inc., the Bonita Springs, Fla., home builder rebuffed him in hopes of finding a richer suitor.
But as the housing market continues to slide, along with WCI’s stock price, it looks as if WCI should have gotten hitched.
Since the company put itself on the market in April, the nation’s housing picture has grown even more grim. Inventory is piling up as interest rates and foreclosure counts rise. Things got worse in mid-June after Bear Stearns Cos. acknowledged reports that two of its hedge funds gambled and lost on risky mortgages. The losses fueled concerns about the housing sector and created a tougher environment for financing a purchase of WCI and its nearly $2 billion debt.
The company pushed its June 15 annual meeting back to Aug. 30 so it could entertain further offers. Since its close before its June 12 announcement that it was delaying the meeting, the stock has fallen almost 21%, including a 5.1% drop yesterday to $16.40. Under Mr. Icahn’s now-expired $921 million offer, shareholders would have pocketed a 16% premium.