Homebuilder giants Pulte Home (PHM) and Centex (CTX) announced a merger today in which Pulte will pay $1.3 billion in stock for Centex to create the nation's largest homebuilder, eclipsing DR Horton (DHI).
While $1.3 billion is a premium to where Centex stock was trading, it matches what Centex reported last quarter as net tangible assets. For Pulte, it is an all stock deal which will not require the commitment of real cash.
Both companies continue to lose money. Investors in either of these two companies should not let the merger announcement distract them from the results to be reported for the three months ending March 31, 2008.
No comments:
Post a Comment