Cheap homebuilders' shares proved too much for Warren Buffett to ignore, and his
is snapping up
for $1.7 billion.
Under the agreement, Clayton Homes' stockholders will receive $12.50 a share in cash. There are about 136 million shares outstanding.
Clayton Homes will become a wholly owned subsidiary of Berkshire Hathaway, and business will continue as usual. James L. Clayton and the Clayton Family Foundation, which together own 28% of Clayton stock, will vote their stock in favor of the merger, Clayton Homes said in a press release.
"Clayton Homes is far and away the premier company in the Manufactured Housing Industry with high quality products and outstanding leadership and personnel," said Buffett, chairman of Berkshire Hathaway. "By retaining discipline, Clayton Homes is the lone tower of strength in an industry battered in recent years by the consequences of lax financing practices."
After the merger, Clayton Homes and its 6,800 employees will remain at the company's Knoxville, Tenn.-based offices.
Shares of the company closed at $11.13 Tuesday on the
New York Stock Exchange