Taylor Morrison Home Corporation (NYSE:TMHC) entered into an exclusivity agreement to acquire William Lyon Homes (NYSE:WLH) from William H. Lyon and others for approximately $840 million on September 13, 2019. Taylor Morrison Home Corporation entered into a definitive agreement to acquire William Lyon Homes from William H. Lyon and others on November 5, 2019. As reported, Taylor Morrison Home Corporation will acquire all of the outstanding shares of William Lyon Homes common stock for per share consideration of $2.5 in cash and 0.8 shares of Taylor Morrison common stock. The transaction consideration mix consists of approximately 90% Taylor Morrison stock and 10% cash. Based on current trading, Taylor Morrison stockholders will own approximately 77% of the combined company while William Lyon Homes' stockholders will own approximately 23%. In case of a termination, William Lyon Homes will pay to Taylor Morrison a termination fee equal to $18 million and Taylor Morrison will pay William Lyon Homes a termination fee equal to $40 million under certain circumstances. Taylor Morrison Home Corporation will expand current Board of Directors from 7 to 9, adding 2 Board members from the current William Lyon Board. William H. Lyon, current Chairman of William H. Lyon, agreed to join the Board of the combined company.

The closing of the transaction is subject to the satisfaction of customary closing conditions including approval of stockholders of William Lyon Homes and approval of the stockholders of Taylor Morrison for the issuance of shares of Taylor Morrison common stock in the transaction. The transaction is also subject to listing/approval of new shares on stock exchange, effectiveness of registration statement (S-4/F-4) as well as receipt by William Lyon Homes of a tax opinion stating that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code. The transaction has been unanimously approved by the Boards of Directors of both Taylor Morrison and William Lyon Homes. William H. Lyon, Executive Chairman and Chairman of the Board and holder of approximately 42% of the voting power of William Lyon Homes common stock, has agreed to vote all of the shares of William Lyon Homes common stock controlled by him in support of the transaction. A special meeting of stockholders of Taylor Morrison and shareholders of William Lyon Homes will also be held on January 30, 2020 to approve the transaction. As of January 30, 2020, stockholders of both companies have voted to approve all stockholder proposals necessary to complete the merger. The transaction is expected to close late in the first quarter or early in the second quarter of 2020. As of January 15, 2020, the transaction is expected to close in early February 2020. As of January 25, 2020, the transaction is expected to close by the end of the first quarter of 2020. As of January 28, 2020, the transaction is expected to be completed by the end of February 2020. As of January 30, 2020, companies expect the merger transaction to close in early February, subject to customary closing conditions.

Citigroup Global Markets, Inc. acted as financial advisor and Scott A. Barshay, John Kennedy, Thomas de la Bastide, Steven J. Williams, Lawrence Wee, Brian Janson and Manuel Frey, David Epstein, Patricia Vaz de Almeida, Andrew Gaines, Jarrett Hoffman, Geoffrey Chepiga, Jeannie Rhee, Steven Herzog, Mitchell Berg, David Mayo, Claudine Meredith-Goujon, William O'Brien and Marta Kelly of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to Taylor Morrison. J.P. Morgan Securities LLC acted as financial advisor and fairness opinion provider and Michael Treska and Paul Tosetti of Latham & Watkins, LLP acted as legal advisors to William Lyon Homes. Terrence R. Allen of Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to the stockholders of William Lyon Homes. Philip Richter of Fried Frank acted as legal advisor to Citigroup Global Markets Inc. J.P. Morgan Securities LLC will receive $3 million fee for the role of fairness opinion provider and $15 million fee for the role of financial advisor. Citigroup Global Markets Inc. will receive a fee of $12 million for the role of financial advisor. Innisfree M&A Inc. acted as information agent to Taylor Morrison for a fee of $25,000. D.F. King & Co., Inc. acted as information agent to William Lyon Homes for a fee of approximately $12,500.

Taylor Morrison Home Corporation (NYSE:TMHC) completed the acquisition of William Lyon Homes (NYSE:WLH) from William H. Lyon and others on February 6, 2020.