Private investor Cerberus Capital Management L.P. has agreed to buy real estate investment and management company LNR Property Corp. for $1.92 billion in cash, LNR said on Sunday.
The Miami Beach, Florida company, which was spun off from home builder Lennar Corp. in 1997, said the new company will be partly owned by LNR's current management, including controlling shareholder, Chairman Stuart Miller.
LNR said Cerberus-backed Riley Property Holdings LLC will pay $63.10 per share for the company, a 7 percent premium to its closing trading price of $59.10 on the New York Stock Exchange on Friday. Based on its outstanding share count as of May 31, that values the offer at $1.92 billion
The company said that including debt and stock options, the the deal is worth $3.8 billion.
The agreement comes on the back of other recent real estate sector deals, including the $7.2 billion sale of The Rouse Co. announced earlier this month.
Miller, who controls 77.4 percent of the votes on the deal through trusts and partnerships, has agreed to exchange a portion of his shares for a 20.4 percent stake in the new company. In addition, LNR management will buy 4.6 percent of the new company. The terms are the same as Cerberus's purchase price.
LNR Chief Executive Officer Jeffrey Krasnoff will be CEO of the new company, Riley Property Holdings.
LNR expects the deal to close by the end of this year or in early 2005.
Cerberus is a private investment firm based in New York.