Shares of real estate development company Forestar (FOR - Get Report) were up more than 12% premarket after home builder D.R. Horton (DHI - Get Report) proposed to purchase a 75% stake in the company for $520 million, or $16.25 per share. The purchase price represents a 14% stake over an existing merger agreement between Forestar and investment firm Starwood Capital Group.
"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 company chairman Donald R. Horton.
Forestar would remain a public company under the proposed deal to allow it to maintain access to capital to help fund its increasing scale.
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