Founder to Take Lyon Homes Private

William Lyon, controlling shareholder of William Lyon Homes, said Tuesday that he planned to take the Newport Beach-based builder private by buying the minority interest in the company’s common stock for $82 a share.

Lyon, 82, a retired Air Force major general who prefers the appellation “General,” owns a 48% equity stake and acts as chief executive and board chairman. Trusts controlled by his son, William H. Lyon, own an additional 24% of the company’s outstanding shares.

Apart from the shares owned by the family, the takeover would cost Lyon about $200 million.

The stock closed Tuesday at $75.25, up 85 cents, on the New York Stock Exchange before the offer was announced.

William Lyon Homes builds single-family houses and town homes in California, Arizona and Nevada that range in price from $200,000 to $2 million. In 2004, the company ranked as the 15th-largest builder in Southern California, with 1,150 sales, according to industry consultant Hanley Wood Market Intelligence.

The company was privately held as recently as 1999. That year, it merged with floundering Orange County-based Presley Cos. and became a publicly traded concern.

Since then, amid the housing market boom nationwide, Lyon’s fortunes -- and its shares -- have soared.

The company’s sales jumped from $407 million in 2000 to $1.8 billion in 2004. Net income rose from $39.3 million to nearly $172 million in the same period.

The stock, which sold for $5.50 a share at the end of 1999, has rocketed 1,268% since then. That has outpaced the gains in many of the company’s larger rivals, including Ryland Corp. (up 961%), Standard Pacific Corp. (527%) and KB Home Corp. (369%).

But Lyon’s shares have stalled over the last 12 months, while shares of many other builders have continued to advance. Lyon’s stock peaked at $93.51 on April 1, 2004.

In part because of its relatively small size, the company hasn’t gotten the kind of attention from Wall Street that its rivals have enjoyed. Its shares are not followed by any of the major brokerage firms.

In his statement, Lyon said he had retained Lehman Bros. as a financial advisor in the proposed transaction. The company’s board has formed a special committee to review his proposal.

The company Tuesday postponed its annual shareholder meeting, which was set for May 9. No new date was announced.

Lyon, a fighter pilot during World War II and the Korean War, became a home builder in 1954 when he formed Luxury Homes in Fullerton with his brother, Leon.