Real Estate Firm Will Pay $55 Million for Developer : Carlsberg Agrees to Bid by Southmark

Carlsberg Corp., one of the largest publicly held real estate developers in California, agreed Wednesday to be acquired by Southmark Corp., a Dallas-based real estate firm.

Southmark will pay $55 million, or $11 per share, for the closely held Santa Monica-based company. Under the agreement, half the payment will be in cash and the rest will be paid in adjustable-rate preferred stock.

The deal is the latest in a string of California acquisitions by Southmark, which is looking for desirable properties in high-growth areas.

The Carlsberg family, which controls 74% of Carlsberg Corp.’s stock, put the entire company up for sale after certain family members said they wanted to sell their 36.7% holding. The company briefly considered buying out the family of Judith A. Carlsberg but decided against it.

Under the terms of the merger, Carlsberg will be merged into a subsidiary of Southmark, with Carlsberg becoming the surviving company. Executives from both companies said the role of Carlsberg’s existing management in the new company had not been determined.

Financial analysts who follow the two real estate companies said the merger made sense, especially for Southmark, a firm with $1.5 billion in annual revenue that has been busy acquiring California properties since 1980. It purchased the 2,400-acre Anaheim Hills project from Texaco last year and in June purchased J. M. Peters Co., one of Orange County’s largest home builders.

“We think Carlsberg is a good company with excellent real estate assets in California,” said Thomas C. Walker, senior vice president for corporate development at Southmark.

Analysts said Carlsberg’s prize property was 2,849 acres in Roseville near Sacramento, worth about $50 million, or 65% of Carlsberg’s estimated asset value. The site is expected to become a prime residential development, said Kenneth Campbell, president of Audit Investments in New York.

Campbell noted that the sale price was below the $16.77-per-share appraised value of Carlsberg’s assets. He said, however, that the $5.77-per-share difference appeared to reflect a discount for the two years that it will take to develop the Roseville property while a Route 65 bypass is constructed nearby.

Last month, Carlsberg reported its first annual deficit since 1972, losing $995,000 on revenue of $33.5 million for the fiscal year ended May 31.