D.R. Horton, Inc. (NYSE: DHI), America's Builder, today announced that the Company has submitted a proposal to the Board of Directors of Forestar Group Inc. (NYSE: FOR) ("Forestar") to acquire 75% of the currently outstanding shares of Forestar for $16.25 per share in cash. The $16.25 per share value represents a 14% premium over the purchase price to be paid to the Forestar stockholders pursuant to the existing merger agreement between Forestar and affiliates of Starwood Capital Group.

Under the proposed transaction, Forestar would remain a public company to ensure continued access to capital to support the increasing scale of the business. D.R. Horton believes continuing Forestar stockholders will have the opportunity to participate in significant value creation through a strategic relationship with D.R. Horton that would help Forestar grow organically into the leading residential land development company in the United States, selling developed residential lots to D.R. Horton and other homebuilders. Forestar would be led by new executive chairman Donald Tomnitz, who served as CEO of D.R. Horton for over 15 years, and a strong management team that is expected to include Forestar's experienced professionals.

"We believe that D.R. Horton is uniquely positioned to make Forestar the country's leading residential land development company. Together, we can grow Forestar into a much more significant and valuable company for all of its stockholders," said Donald R. Horton, Chairman of the Board. "The Forestar proposal is a continuation of D.R. Horton's stated strategy of expanding relationships with land developers across the country and growing the optioned portion of its land and lot position to enhance operational efficiency and returns. We urge the Forestar Board to act quickly on this proposal which is in the best interests of their stockholders."

The transaction would be effected through a merger of a newly formed, wholly owned subsidiary of D.R. Horton with Forestar (the "Merger"). The Merger would have a cash election feature in which Forestar stockholders would have the right to elect, for each share of common stock held, either to receive $16.25 per share in cash as merger consideration, or to retain such share of the surviving entity (the "Forestar Successor"). Cash and stock elections will be prorated, as appropriate, such that 75% of the shares of Forestar common stock outstanding before the Merger are converted into the $16.25 per share cash consideration. Following the Merger, D.R. Horton would own 75% of the outstanding Forestar Successor shares, and existing stockholders would own 25% of the outstanding Forestar Successor shares. Forestar would remain a public company, and its common stock will trade on the NYSE.

D.R. Horton has the cash and other immediately available capital to fund the approximately $520 million investment.

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