U.S. Home Stock Surges on News of Takeover Bid
U.S. Home Corp.’s stock jumped sharply Tuesday on the strength of news that a company headed by Los Angeles financier Charles Knapp and Pacific Realty, a large builder headquartered in Dallas, have formed a partnership that seeks to buy a controlling interest in the firm.
The price of shares in Houston-based U.S. Home, one of the nation’s largest single-family home builders, rose 87.5 cents to close at $5.125. Volume was 905,000 shares, 11th heaviest on the New York Stock Exchange.
Trafalgar Holdings, Knapp’s company, and Pacific Realty disclosed their intentions in a recent filing with the Securities and Exchange Commission. The name of their new partnership is Trafalgar/Pacific Acquisition Co.
The partnership, according to its SEC filing, “intends to obtain control of a significant portion†of U.S. Home’s stock and seek “representation†on the company’s board of directors. The partnership also indicated that it might eventually seek a merger with U.S. Home.
Earlier this year, U.S. Home rejected a merger proposal from Pacific Realty, which already owns more than 9% of U.S. Home’s stock.
Pacific Realty is a privately held firm that specializes in building income-producing properties. U.S. Home has sharply curtailed its operations in recent months due to heavy losses.
Trafalgar is the investment banking firm Knapp formed in 1984 after he resigned as chairman and chief executive of Financial Corp. of America, the nation’s largest savings and loan company.
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