Dream Finders boosts Beazer bid to $32 a share in pursuit of deal

Dream Finders Homes raised its cash offer for Beazer Homes to $32 a share, a 24% increase from its May bid, after the target demanded a 12-month standstill that the suitor called an impediment to a deal.

Dream Finders Homes raised its buyout offer for Beazer Homes to $32 a share in cash, a 24% increase from its May bid, as the homebuilder went public with its latest proposal after months of resistance from the target.

"Beazer's actions do not appear to be focused on pursuing a path that can maximize value for shareholders," Chief Executive Patrick Zalupski said.

The latest offer, submitted June 30, follows a series of escalating proposals — $28.50 a share in February, $29 in March, $25.75 in May and $29.25 last month. Beazer shares jumped 12% to $30.61 in premarket trading Wednesday, reflecting market optimism that a deal at a premium will materialize.

The acquisition would give Dream Finders, based in Jacksonville, Florida, a significantly larger national footprint in the US homebuilding sector, where consolidation has been accelerating as builders seek scale amid elevated mortgage rates and constrained existing-home inventory.

Dream Finders said Beazer has created roadblocks in negotiations by demanding onerous preconditions to starting due diligence, including a nondisclosure agreement with a 12-month standstill period that would prevent Dream Finders from making a competing bid or going directly to shareholders. The suitor described the demand as an attempt to impede the potential deal.

The $32-a-share offer represents a roughly 40% premium to Beazer's stock price before Dream Finders first went public with its interest in May, when Beazer shares traded near $18. The bid values Beazer at about $875 million on an equity basis, based on the company's roughly 27.3 million shares outstanding.

Beazer reported a second-quarter loss in April, sending its shares lower and creating an opening for Dream Finders to press its pursuit. The Atlanta-based builder operates across 13 states and delivered more than 4,400 homes in its most recent fiscal year.

The US homebuilding industry has seen a wave of consolidation as publicly traded builders use their access to capital to acquire smaller competitors. The combination of Dream Finders and Beazer would create one of the top 10 homebuilders by revenue in the US, according to company filings. The last major public-to-public combination in the sector — Lennar's acquisition of CalAtlantic in 2018 for $9.3 billion — reshaped the competitive landscape and was followed by a period of margin expansion as the combined entity captured procurement savings.

For Dream Finders, which went public in 2021 and has grown through acquisitions, the Beazer deal would mark its largest transaction by a wide margin. The company generated $3.8 billion in revenue in its most recent fiscal year, while Beazer reported $2.1 billion. A combined entity would have annual revenue exceeding $5.9 billion, placing it among the largest publicly traded homebuilders.

The deal still requires regulatory approvals and Beazer board engagement. Dream Finders said it is prepared to take its offer directly to Beazer shareholders if the board continues to refuse negotiations.

A representative for Beazer didn't immediately respond to a request for comment.

This article is for informational purposes only and does not constitute investment advice.