Home-building shares up on buyout rumor
Tue Feb 26, 2008 5:20pm EST
By Ilaina Jonas
NEW YORK (Reuters) - Shares of U.S. home builders rose on Tuesday on rumors that a group from the United Arab Emirates has offered to buy Lennar Corp (LEN.N: Quote, Profile, Research), the second largest home builder, and on upbeat remarks by real estate tycoon Sam Zell, analysts said.
Goldman Sachs Group Inc (GS.N: Quote, Profile, Research) was rumored to have been hired as the investment banker for the deal, Buck Horne, an analyst with Raymond James and Associates, said of the rumor posted on theflyonthewall.com.
A spokesman for Lennar did not return phone calls. A Goldman spokesman declined to comment.
Zell, speaking on the cable television channel CNBC, said he sees a U.S. housing rebound this spring.
"I think starts have already pretty much bottomed out," Zell said. "I think the housing market this spring will begin its recovery phase."
Lennar shares closed up 8.7 percent, or $1.63, to $20.41 on the New York Stock Exchange.
Beazer Homes USA Inc (BZH.N: Quote, Profile, Research) shares climbed 7.6 percent, or 59 cents, to $8.36, while Hovnanian Enterprises Inc (HOV.N: Quote, Profile, Research) saw its shares close up 9.3 percent, or 92 cents, to $10.82. Centex Corp (CTX.N: Quote, Profile, Research) also closed up 9.3 percent, or $2.22, to $26.05.
The benchmark Dow Jones U.S. Home Construction Index .DJUSHB, was up 6.4 percent.
"That's what driving these things," said Horne. "It's got the whole group running on these kind of rumors, because the data is awful."
Jim Wilson, JMP Securities analyst said Zell's remarks also boosted the stocks.
Earlier, the S&P/Case-Shiller U.S. National Home Price Index, which tracks sales of existing homes, fell 8.9 percent for the year and 5.4 percent in the final three months. showing prices fell at a more precipitous rate at the end of the year. |
