Forestar Group Inc. is facing a lawsuit over its pending merger with Starwood Capital Group affiliates.
The putative class action lawsuit was filed June 2 in the U.S. District Court for the Western District of Texas, with Forestar and its directors, as well as Starwood and its affiliates Terra Firma Merger Parent LP and Terra Firma Merger Sub LP, as the defendants.
In the complaint, the shareholders allege that the defendants disseminated "a materially misleading" proxy statement regarding the proposed merger, according to a filing. Among other things, the lawsuit seeks to enjoin the consummation of the proposed deal.
Forestar also recently received a new unsolicited bid from D.R. Horton Inc. to buy 75% of the former's outstanding common shares for $16.25 per share. Forestar had said it will review the D.R. Horton bid, which represented a 14% premium over the purchase price in the Starwood deal.