Buyer Backs Out of J. M. Peters Deal : Construction: Newport Beach-based company won’t be purchased by state’s largest home builder, Kaufman & Broad.

In an unexpected move, construction giant Kaufman & Broad Home Corp. announced Friday that it has abandoned its offer to buy Newport Beach home builder J. M. Peters Co.

Officials of Los Angeles-based Kaufman & Broad and J. M. Peters were tight-lipped about the reasons why the deal fell apart.

“We’re really not saying much, (but) it reflects the fact that there were many other opportunities, possibly of a more attractive nature,” said Bernie Sandalow, a Kaufman & Broad spokesman.

Kaufman & Broad, California’s largest home builder, had been interested in developing a base in Orange County. Last year, it formed a new division, Vintage Communities in Newport Beach, offering upscale homes.

Kaufman & Broad entered negotiations with the federal Resolution Trust Corp. early last month to acquire control of J. M. Peters, beating out a reported bid by company founder and chairman James Peters for negotiating rights.

The deal, which involved purchase of up to 12 million shares--or 87%--of J. M. Peters common stock, would have given Kaufman & Broad a major inroad into the Orange County market.

The RTC since last year has been seeking buyers for J. M. Peters as part of the liquidation of failed San Jacinto Savings and Loan Assn. of Houston, the majority owner of the Newport Beach company. The RTC is the federal agency in charge of liquidating the assets of failed thrifts.

Industry analysts said they were not surprised that Kaufman & Broad balked at the deal, citing the complexities of a buyout involving RTC.

“It was probably too problematic for” Kaufman & Broad, said Barbara Allen, a stock analyst for Oppenheimer & Co. in New York. “RTC is competing with a lot of other opportunities in the marketplace.”

RTC officials declined to comment Friday.

Peters said Friday that he was not involved in the talks and did not know why they broke off. But he said there are several other possible buyers for the home builder.

He declined to name the prospective buyers or to say whether he plans to make another bid for control of the company.

Industry insiders had said that the Kaufman & Broad offer was a good move for the company. While other California builders have suffered through the recession, Kaufman & Broad has been profitable and raising money for expansion through public stock offerings.

The latest development probably means that an out-of-state firm eventually will take control of J. M. Peters, which recently valued its land and homes under construction at $260 million. The company owns properties in Orange, Riverside, San Diego, Los Angeles and Ventura counties.

“My best guess is there’s nobody else in Southern California to have the wherewithal to do the deal,” said Larry Webb, president of A-M Homes of Southern California and a former division president with Kaufman & Broad.

Kaufman & Broad stock, traded on the New York Stock Exchange, closed Friday unchanged at $17.75 a share.