(Reuters) - Lennar Corp (N:LEN), the No. 2 U.S. homebuilder, said it would buy WCI Communities Inc (N:WCIC), which makes luxury homes, in a $643 million-deal that will combine two of the largest homebuilders in Florida.
Lennar's offer of $23.50 per share – half in cash and half in stock – represents a premium of about 37 percent to WCI's Wednesday close. WCI shares rose to $23.50 premarket on Thursday.
Lennar, which mainly caters to buyers looking for a second home, while WCI calls itself a lifestyle community developer and builds single-family and multi-family luxury homes, including luxury high-rise towers.
"WCI's land portfolio dovetails perfectly with our own Florida footprint and expands our product offering to capture more of the move-up market," Lennar Chief Executive Stuart Miller said in a statement.
The transaction, which would be in the form of a merger between WCI and a newly formed Lennar unit, gives WCI an enterprise value of $809 million, Lennar said.
WCI said the merger agreement gave it 35 days to shop for a higher offer.
Lennar said it had the option of increasing the cash portion of the offer, including paying the full amount in cash.
WCI's financial advisers are Credit Suisse (SIX:CSGN) and Citigroup (NYSE:C) Global Markets Inc and its legal advisers are Latham & Watkins LLP.
Lennar's legal adviser is Goodwin Procter LLP and Gibson Dunn & Crutcher LLP is its special tax counsel.