Edina Realty parent will be taken private
Neal Gendler
Star Tribune
Published 08/30/01
Edina Realty parent HomeServices.com, the nation's
second-largest real estate brokerage, is to be taken private by
its owner, MidAmerican Energy Holdings Co.
By Sept. 10, the HomeServices board will make a formal
recommendation on the Aug. 22 offer by MidAmerican --
itself owned by investor Warren Buffett's Berkshire Hathaway
Inc. -- to pay $17 per share for the 16.5 percent of
HomeServices it doesn't already own.
HomeServices shares closed today at $17.18. The stock traded
near $12 until Aug. 23, when it gained $4.49 on news of
MidAmerican's offer.
Fewer than 1 million shares remain outstanding from the sale
of 3.25 million shares in a 1999 initial public offering that
closed at the low end of an expected $15 to $17 a share.
Omaha-based MidAmerican bought 500,000 of those shares in
April 2000 and HomeServices, based in Edina, bought back 1.7
million last October.
HomeServices' value "never has been truly recognized in the
public marketplace," HomeServices CEO Ron Peltier said. He
said privatization was not preparation for a sale and would not
affect consumers.
Peltier said HomeServices is a profitable company that has met
MidAmerican's performance expectations.
For the first half of 2001, HomeServices had revenue of $280.3
million, up 23.7 percent from $226.5 million in the first half of
2000. Income of $6 million was up 27.2 percent from $4.7
million in 2000.
HomeServices' stock, however, has languished, which Peltier
attributed largely to "issues that were not related to our
fundamentals; they were more issues in the equities market."
When the company went public, he said, the market was
focused on technology firms, and six months later, "the
markets began to correct and adjust and have not really
recovered."
Since going public, the company's Web offerings have
increased and it has grown from seven brokerages in 10 states
to 10 brokerages in 12 states.
In addition, HomeServices has been adding mortgage and title
affiliates to a number of acquired brokerages that lacked them.
Documents on HomeServices' Web site
(http://www.homeservices.com ) show that shares would be
bought by a wholly owned MidAmerican subsidiary called
HSNV Acquisition Corp., which then would be merged into
Mid American.
-- Neal Gendler is at ngendler@startribune.com .
© Copyright 2001 Star Tribune. All rights reserved. |
