Updated from 3:22 p.m. EDT
said Wednesday it will take over
in a deal worth $1.3 billion that will create the nation's largest homebuilder.
Under the terms of the agreement, Pulte, of Bloomfield Hills, Mich., will exchange 0.975 shares for each share of Centex. That ratio values Dallas-based Centex at $10.50 a share. Including $1.8 billion of debt, the transaction is worth $3.1 billion.
Centex closed Tuesday at $7.62, and the stock rose 18.9% to $9.06. The shares have a 52-week range of $4.91 to $26.09. Pulte fell 10.5% to $9.64.
The two companies would have had revenue of $11.6 billion on a combined basis in 2008. After the pact closes, Pulte shareholders will own about 68% of the combined company, and Centex stockholders will have the rest.
Pulte and Centex expect to complete the transaction in the third quarter.
The merger could potentially set off a wave of consolidation in the sector, which has been one of the most battered areas of the market over the past couple of years. Sales of new and existing homes have been weak for months and months, though recently some
glimmers of hope
have emerged in the data.
, currently the top homebuilder in the U.S., lost 4% to $9.79. Elsewhere,
was up 5.1% at $7.49, and
was lower by 3.2% at $17.42.
gained 14.8% to $1.01, and
added 5.2% to $1.62.
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