NV Unveils $315-Million Offer to Buy Ryan Homes

NV Homes announced a $315-million takeover bid Tuesday for Ryan Homes, the nation’s eighth-largest residential home builder, sending Ryan and other home builder shares soaring in active trading.

Though the NV bid translated to $45 per share, Ryan rose $7 to $50 a share in heavy trading, reflecting a belief on Wall Street that it would respond aggressively, possibly with a counteroffer that would drive the price even higher.

NV Homes is a Virginia limited partnership that builds and sells single-family homes, town homes and condominiums. Its stock rose $1.375 a share to $12 in active American Stock Exchange trading after the McLean-based company said it would begin a $45-a-share tender offer for Ryan within five business days.

The bid for the Pittsburgh housing concern came as a surprise, as the industry has generally performed poorly in recent weeks. Concern over rising interest rates has plagued the industry and demand for housing has softened from earlier this year.

But the housing group still benefits from pent-up demand created in a five-year stretch of high mortgage interest rates, said Barbara Allen, analyst at Prudential-Bache Securities.

Ryan is viewed as one of the better-managed companies in the trade, analysts agreed.

NV Homes had revenue of $113.6 million in 1985, compared to Ryan’s $566.2 million.

Declining to speculate on what countermeasures Ryan would take, analyst Lawrence Horan of Smith Barney, Harris Upham & Co. said a bidding contest could escalate into the mid-$50-per-share area.

Ryan shares have been rising since Friday on speculation that a bid might be coming, Horan said. “People felt there was something afoot,” he said.

Ryan’s top management sponsored a buyout bid of its own two years ago, though the $24-a-share proposal was rejected as inadequate by an independent committee.

Ryan, headed by Chairman Malcolm Prine, said it had not seen details of NV’s proposed offer and would not comment.