L.A.-Based Group Bids $150 Million for Del Webb
In a curtain raiser for a potentially unfriendly takeover move, a group led by Los Angeles real estate investor Calmark Financial made an unsolicited $150-million cash bid Tuesday to buy Arizona developer Del Webb Corp. for $17 a share. Webb made no immediate response.
The Calmark group, which owns 472,200, or 5.1%, of Webb’s 9.2 million publicly traded shares, said it had broached the idea of a “friendly negotiated takeover” for cash in a meeting early this month with Webb Chairman Philip Dion.
However, Calmark quoted Dion as saying at that time that the company “had no interest in such a transaction.”
In a 13D filing Tuesday with the Securities and Exchange Commission, the group disclosed that it made a written offer to Webb’s board in a letter dated Friday.
The filing said if Webb declines to negotiate a sale, the group “may consider various other means to acquire” it. The filing said this might include a merger or a tender offer and added that it might launch a proxy solicitation to elect “some or all” of the members of Webb’s board.
Webb has been restructuring itself since last March to dispose of the remains of its former casino empire in Nevada and to concentrate on its real estate holdings, largely in Arizona. These include the original Sun City, a huge adult community, Sun City West and Sun City Vistoso, both under development. It has selected Las Vegas for a fourth, Sun City Summerlin.
A Webb spokesman in Phoenix said Tuesday that Dion and others in top management were out of the city and have not seen the 13D filing. As a result, the company made no immediate comment on the Calmark group’s offer.
Webb’s shares, which closed at $15.375, up 37.5 cents, Tuesday on the New York Stock Exchange, have risen 14% since last Thursday, when the price stood at $13.50. It rose 37.5 cents that day and $1.125 Friday.
Calmark Financial is part of a privately owned network that develops, manages and syndicates residential and commercial real estate. The parent, Calmark Holding Corp., last December bought out the Vagabond hotel chain that had been owned by imprisoned Wall Street speculator Ivan Boesky.
Since 1986, Uri Sheinbaum has been chairman and Donald J. Brumlik president of the Calmark entities. Brumlik said they and John Huskey are the owners of the Calmark firms, which together have revenues of about $200 million a year.
Included in the Calmark group is ESA Associates, a Los Angeles-based limited partnership, which last July made an unsolicited bid of $17.50 a share for Webb.
ESA then owned 4% and now holds 2.9% of Webb’s stock, or more than half of the Calmark group’s stake. Webb did not answer the earlier proposal by its expiration Aug. 3, saying it did not receive information it requested from ESA. Developer Robert Blake and lawyer Sanford Hillsberg are general managing partners in ESA, which said it had financing arranged from Commercial Bank of Kuwait and Trafalgar Holdings Ltd.
The group making the new offer includes three Calmark entities and two other entities, as well as Sheinbaum and several other individuals.
They set out recent stock purchases at prices ranging from $12.50 to $13.50 a share between mid-October and mid-December.
The Webb company expects to withdraw early in 1989 from its role as manager of the Claridge hotel-casino in Atlantic City, which was responsible for most of Webb’s $96.6-million net loss in 1987. The company has reported net profit of $314,000 for the first nine months of 1988.
Webb also intends to sell its High Sierra hotel-casino in Lake Tahoe, having previously sold the Sahara and the Mint hotel-casinos in Las Vegas and, last October, the Nevada Club casino in Laughlin, Nev. The company also has agreed to sell its marina and recreational property operations in western states.
Two entities hold major interests in Webb. Webcott Holdings, owned by Los Angeles investor James J. Cotter, has 8% and Hong Kong-based Industrial Equity (Pacific) Ltd., controlled by New Zealand financier Ronald A. Brierley has 9.3%.
DEL WEBB AT A GLANCE
Del Webb Corp., based in Phoenix, is a holding company for various real estate development and leisure operations.
9 mos. Year ended Dec. 31 Sept. 30 1987 1986 1985 Revenue (millions) $72.3 $288 $282 $271 Net income (loss) (millions) 0.3 (87.5) 19.6 19.6
Assets $262 million
Employees 7,200
Shares outstanding 9.2 million
52-week price range $7.125-$15.75
Book value $11.25
Tuesday close (NYSE) $15.375, up $0.375
Sources: Value Line, Standard & Poor’s
