Presley Extends Deadline for Terms of Lyon Purchase

The Presley Cos. said Wednesday that it extended until April 30 the deadline for a final agreement governing William Lyon Homes’ proposed purchase of a controlling interest in the Newport Beach-based home builder.

Presley wants the extra 30 days to consider a last-minute change by Lyon Homes.

The new deadline came after Lyon Homes proposed Tuesday that it be allowed to begin acquiring the bulk of Presley’s Series B common shares--stock owned by the company’s major lenders. The stock purchases would enable Lyon Homes to further increase its stake in Presley.

The previous agreement had called for the two companies to complete a definitive agreement by the end of March.

Presley also disclosed Wednesday that it incurred about $1.3 million in costs last year associated with its effort to find an investment partner to help speed its recovery from a lengthy financial slump.

The company posted a $9.8-million profit for 1998, versus a loss of $89.9 million in 1997. Revenue for the last year was $368.3 million, up 12% from $329.9 million.

Lyon Homes, based in Newport Beach, is owned by longtime Southern California builder William Lyon. He also is Presley’s largest shareholder, with a 23% stake in the company.

Lyon has offered to acquire an additional 37% of Presley’s Series A common stock--about 12.7 million shares--for 62 cents a share, or about $7.9 million. As part of the complex deal, Presley would then acquire Lyon Homes for $48 million.

Lyon altered the proposal Tuesday when he sought approval to negotiate for the bulk of the approximately 15 million shares of Series B common stock held by Presley’s investment banks. Lyon Homes plans to acquire all but about 2.5 million of those shares, according to Presley’s annual report.

Series B shareholders, the investment banks that have extended tens of millions of dollars of credit to Presley in recent years, can elect three of the company’s nine directors and have equal voting rights with Series A shareholders on other matters. Because much of the Series B stock was converted to Series A shares last year, it now accounts for about 30% of the total common stock.

Presley’s Series A common stock closed unchanged at 62 cents Wednesday in New York Stock Exchange trading. The price has hovered around 63 cents since Lyon entered his bid on Feb. 18. The Series B stock is not publicly traded but is convertible into Series A shares.