Stockholder Claims Forestar Group's Proxy Statement Lacks Detail

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Forestar Group Inc. and its board of directors are facing claims that they misled stockholders by filing a misleading proxy statement in connection with a merger between Forestar and affiliates of Starwood Capital Group. Forestar’s CEO allegedly said the company made “exceptional progress” in 2016 and enjoyed “a transformative year,” leading the plaintiff to believe that the company is worth more than was proposed in the merger. He says the agreement undervalues the company and is less favorable than another offer presented by D.R. Horton, Inc. “Indeed, the $14.25 Merger Consideration is actually below the Company’s April 11, 2017, closing stock price of $14.40, and is 14% below D.R. Horton’s offer price of $16.25 per share,” the complaint argues.

According to the plaintiff, the proxy statement is missing information concerning Forestar’s financial projections and the analyses performed by its financial advisor. The suit says the company’s nondisclosures regarding the process leading up to the proposed merger is concerning to the plaintiff, who argues that he and other stockholders are unable to determine whether the deal is fair to them.