Forestar Group Inc. notified holders of its 3.75% convertible senior notes due 2020 of a fundamental and make-whole fundamental change to the notes, following the company's merger with D.R. Horton Inc.
Because of the fundamental change, holders may convert their notes through Nov. 9 into cash and common shares of the surviving entity in the merger. In particular, holders may convert their notes into $579.77062 in cash and 8.17192 shares of post-merger Forestar common stock per $1,000 aggregate principal amount of notes.
The merger completion also resulted in a make-whole fundamental change under the notes' indenture, whereby Forestar has the option to settle any conversions in the form of units at the aforementioned conversion ratio, cash, or a combination of both.
Forestar also launched an offer to repurchase the notes at 100% of their principal amount, plus applicable interest. The deadline for tendering the notes is 5 p.m. ET on Nov. 9.
U.S. Bank NA is the paying agent and conversion agent.