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Forestar Group Inc. Announces Pricing Of Tangible Equity Units

Stocks in this article: FOR

Forestar Group Inc. (NYSE:FOR) (the “Company”) today announced the pricing of an underwritten public offering of 5,400,000 6.00% Tangible Equity Units (the “Units”), each with a stated value of $25.00, which will result in net proceeds to the Company of approximately $130.27 million. The underwriters have a 13-day option to purchase up to an additional 600,000 Units from the Company. Settlement of the offering is subject to customary closing conditions and is expected to occur on November 27, 2013.

Each Unit will consist of a prepaid stock purchase contract and an amortizing note. Unless earlier settled or redeemed, each stock purchase contract will automatically settle on December 15, 2016 (subject to postponement in limited circumstances) for a number of shares of the Company’s common stock between 1.0913 and 1.3095 shares (subject to adjustment in certain circumstances). The amortizing notes will pay proportionally equal quarterly cash installments of $0.3750 per note (except the first such installment, which will be $0.4500 per note), which will constitute a payment of interest and a partial repayment of principal, and which in the aggregate will be equivalent to a 6.00% cash payment per year with respect to each $25.00 stated amount of each Unit. The amortizing notes will have a final installment payment date of December 15, 2016 and will be unsecured senior obligations of the Company. All of the securities to be offered will be issued under the Company’s currently effective shelf registration statement. The Company’s common stock is listed on the New York Stock Exchange under the symbol “FOR.”

The Company intends to use the net proceeds from the offering for general corporate purposes, including investments in strategic growth opportunities.

Goldman, Sachs & Co. is serving as the sole book-running manager for the offering and KeyBanc Capital Markets Inc., JMP Securities LLC, Capital One Securities, Inc., J.P. Morgan Securities LLC, D.A. Davidson & Co. and UBS Securities LLC are acting as co-managers.

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