Shareholder Vote April 16 : Housing Maker Reaffirms OK on Lyon Purchase Bid

Despite the contention of two minority shareholders that builder William Lyon’s offering price to buy Golden West Homes is too low, directors of the Santa Ana-based manufactured-housing company have “reaffirmed” their decision to recommend acceptance of the Lyon offer.

Harry Karsten Jr., president of Golden West Homes, said in a prepared statement that the board “recently met to assess current market and business conditions affecting the company.”

“Based upon that review,” Karsten added, “the board reaffirmed its recommendation to shareholders to vote in favor of a merger with Golden Acquisition Corp., an affiliate of the William Lyon Co. and Gen. William Lyon.” Lyon is also chairman and the largest shareholder of Golden West Homes.

The shareholders will vote on the proposed merger April 16 at their annual meeting.

Terms of Merger

Under terms of the merger, Golden West shareholders other than William Lyon Co., a major home-building firm owned primarily by Lyon, will receive $5 per share in cash for each Golden West share. Lyon, who is also chairman of Newport Beach-based AirCal, already owns 26.9% of Golden West’s common stock. He would pay a total of $12.4 million for all 2.5 million shares of Golden West’s outstanding common stock that he does not already own.

But brothers Michael and Roy Doumani, who hold 176,000 common shares of Golden West, have said they believe the stock is worth more than $5 a share. They requested a reappraisal of Golden West’s value by the Los Angeles-based brokerage firm of Bateman, Eichler, Hill Richards Inc., taking into account a number of factors, including the recent drop in mortgage rates that is spurring a revival of home buying.

Michael Doumani, senior vice president of the brokerage firm of Morgan, Olmstead, Kennedy & Gardner, said Monday that his attorneys received a letter from Bateman Eichler in which Bateman Eichler reasserted its belief that the Lyon offer is fair.

Doumani said he had not yet decided how to respond to Golden West’s rejection of his analysis that its stock is being “grossly” undervalued. He said he was exploring his options but could not discuss what action he might take. “Even if I knew, I wouldn’t disclose that,” he said. “I wouldn’t want to tip my hand.”