Peters Building Firm to Offer Public Shares

Southmark Corp. said it plans to take its Newport Beach-based J.M. Peters Co. house-building subsidiary public with an offering of 4.2 million shares of common stock.

No price has yet been set for the shares, but Southmark said it will retain 65% to 70% of Peters’ common shares after the public offering.

In a prepared statement, Southmark said proceeds from the stock sale would be used to reduce the company’s outstanding debt and for working capital. A Southmark official said the sale is part of a “restructuring to monetize the assets of Southmark and recognize the value of our subsidiaries.”

J.M. Peters Co. is the third Southmark subsidiary to file for an initial public offering since March, said Jane MacQueen, director of investor relations. The other two were a nursing home management company and a life insurance firm.

Drexel Burnham Lambert, Bear Stearns & Co. and E.F. Hutton & Co. are the managing underwriters of the proposed offering.

J.M. Peters Co. Inc. is one of the largest builders of single-family homes in Southern California for the “move-up” market comprising upper-income buyers who have previously owned a principal residence. The company was founded in 1975 and was acquired by Southmark, a Dallas-based real estate and financial services firm, in 1985.