Robbins LLP: Acquisition of Ryland Group, Inc. (RYL) by Standard Pacific Corp. (SPF) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Ryland Group, Inc. (NYSE: RYL) by Standard Pacific Corp. (NYSE: SPF). On June 14, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Standard Pacific will acquire Ryland. Under the terms of the agreement, Ryland shareholders will receive 1.0191 shares of Standard Pacific common stock for each share of Ryland they own, the value which is equivalent to $42.59 per share.
Is the Proposed Acquisition Best for Ryland and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Ryland is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $42.59 merger consideration represents a discount of -0.4% based on Ryland’s closing price on June 12, 2015. This premium is significantly below the average one-day premium of nearly 88.5% for comparable transactions within the past three years. Further, the $42.59 merger consideration is below the target prices of eight analysts ranging from $55.00 set by an analyst at Evercore ISI on April 14, 2015 to $43.00 set by an analyst at MKM Partners on January 30, 2015. In the last three years, Ryland traded as high as $50.01 on May 14, 2013, and most recently traded above the target price – at $42.77 – on February 4, 2015.
On April 30, 2015, Ryland reported strong quarterly earnings results for its first quarter 2015. Total revenues were $517.4 million, an increase of 5.7% compared to Q1 2014. Net income was $26.5 million, an increase of 12.5% over Q1 2014. Additionally, Ryland has beat consensus analyst estimates for adjusted EPS and adjusted net income for 3 out of the past 4 quarters.
In light of these facts, Robbins LLP is examining Ryland’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Ryland shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Ryland shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.