Southmark OKs New Deal for Carlsberg : Will Pay $53 Million for Santa Monica Developer

Southmark Corp. on Wednesday signed a new agreement to buy Carlsberg Corp., the Santa Monica-based real estate developer, for $53 million in cash and securities.

Neither company would comment on the price, which is $2 million less than what Dallas-based Southmark agreed to pay under a previous merger agreement.

Southmark terminated the earlier agreement Oct. 20, about one month after it was signed.

Under the new agreement, Southmark will pay $5.50 in cash and $5 in adjustable-rate preferred stock for each Carlsberg share. Carlsberg will be merged into a subsidiary of Southmark, with Carlsberg becoming the surviving entity.

The deal is expected to be completed next January, according to a joint statement from the companies.

Controls 74% of Stock

The sale came as the result of a dispute within the Carlsberg family, which controls 74% of the company’s stock.

In an earlier interview, Richard P. Carlsberg, the firm’s president, said his sister-in-law, Judith A. Carlsberg, wanted to exchange her Carlsberg holdings “for something more liquid,” and other family members decided against buying her out. Together with her children, Judith, the widow of company founder Arthur W. Carlsberg Jr. controlled 36.7% of Carlsberg’s shares.

Some members of the Carlsberg family agreed to vote their shares, which total 48.7% of Carlsberg’s outstanding shares, to Southmark. Those shares include the ones held by Judith and her family, a Carlsberg spokesman said.

For Southmark, a $1.5-billion-per-year real estate development firm, the deal expands its penetration into the California real estate market. Since 1980, it has acquired several residential properties, including J. M. Peters Co., one of Orange County’s largest home builders, in June.

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