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MDC stockholders greenlight merger with Sekisui House

EditorNatashya Angelica
Published 02/04/2024, 20:52

DENVER - M.D.C. Holdings, Inc. (NYSE: NYSE:MDC), known for its Richmond American Homes (NYSE:AMH) brand, announced today that its stockholders have voted overwhelmingly in favor of a merger with Japan's Sekisui House, Ltd. The approval was secured during a Special Meeting of Stockholders, where approximately 99.8% of votes were cast in support of the agreement.

Under the terms of the merger, MDC stockholders are set to receive $63.00 per share in cash upon the transaction's closure, which is anticipated in the second quarter of 2024. This payout is contingent on meeting customary closing conditions before finalization.

The company's executives, including Founder and Executive Chairman Larry Mizel and President and CEO David Mandarich, expressed gratitude for the stockholders' support and anticipation for the company's future as part of Sekisui House. They also acknowledged the dedication of their team members during the transition period.

MDC, founded in 1972, has established itself as a significant player in the U.S. homebuilding sector, aiding over 240,000 homebuyers since 1977. The company's presence spans across multiple states, offering mortgage lending, insurance, and title services through its subsidiaries.

The final vote results from the Special Meeting will be disclosed in a Current Report on Form 8-K, to be filed with the U.S. Securities and Exchange Commission.

This merger is expected to elevate MDC's position in the homebuilding industry, as it joins forces with Sekisui House, aiming to become a top five homebuilder in the United States. However, it is important to note that this announcement contains forward-looking statements, and the completion of the merger is subject to various conditions and potential risks outlined in the company's communications.

The information provided in this article is based on a press release statement from M.D.C. Holdings, Inc.

InvestingPro Insights

In light of M.D.C. Holdings, Inc.'s (NYSE: MDC) recent merger announcement, several metrics from InvestingPro provide a more in-depth look at the company's financial health and market position. As of the last twelve months ending Q4 2023, MDC's market capitalization stood at $4.73 billion, reflecting the size and scale of the business in the competitive homebuilding market.

The company's price-to-earnings (P/E) ratio, a measure of its current share price relative to its per-share earnings, was 11.21, suggesting that investors may find the stock reasonably valued compared to industry peers.

InvestingPro Tips highlight that MDC has demonstrated a commitment to returning value to shareholders, having raised its dividend for 7 consecutive years and maintained dividend payments for 11 consecutive years.

This consistent dividend growth, coupled with a strong return over the last year, with a 69.41% one-year price total return, may be particularly attractive to income-focused investors. Additionally, the company's liquid assets exceed its short-term obligations, indicating a stable financial position which is essential as MDC enters into this merger agreement.

With these financial metrics in mind, investors considering MDC as part of their portfolio should also note that the company's stock price is trading near its 52-week high, at 99.95% of this level. This could signal market confidence in the company's growth prospects, especially as MDC prepares to join forces with Sekisui House. For those looking for more insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/MDC, which could further inform investment decisions. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking more valuable tips and data to guide your investment strategy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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