Credit & Debt: KB Home Seeks To Unload French Division

As yet another sign of how tough times are for the homebuilding industry, former mega-giant KB Home is looking to trim its supply of French cuisine, so to speak:

KB Home might be tempted by the $783 million such a sale could bring. The company said it is currently evaluating that offer and is also evaluating other strategic alternatives, including a public or private offering of its shares in the French unit or retaining its shares. The money could come in handy as the U.S. housing market continues to buckle. Thomas Smith, an analyst with Standard & Poor's Equity Research, says the company could use the money to bolster its balance sheet, or to fund future land acquisitions if prices fall to the point where the company sees a good opportunity. Either way, "cash gives you maximum flexibility," Smith says.

Longtime readers will remember KB Home being notorious for their mandatory arbitration practices, and for their former CEO Bruce Karatz being booted for shady stock options scams.

Given that the company's reputation as a homebuilder is generally one of the worst in the business, I'd say they need all the flexibility they can handle.

Posted at May 11, 2007 04:50 PM

digg this story

Trackback Pings

TrackBack URL for this entry:
http://weblog.housing.com/cgi-bin/mt/mt-tb.cgi/380

As yet another sign of how tough times are for the homebuilding industry, former mega-giant KB Home is looking to trim its supply of French cuisine, so to speak: KB Home might be tempted by the $783 million such a sale could bring. The company said it is currently evaluating that offer and is also evaluating other strategic alternatives, including a public or private offering of its shares in the French unit or retaining its shares. The money could come in handy as the U.S. housing market continues to buckle. Thomas Smith, an analyst with Standard & Poor's Equity Research, says the company could use the money to bolster its balance sheet, or to fund future land acquisitions if prices fall to the point where the company sees a good opportunity. Either way, "cash gives you maximum flexibility," Smith says. Longtime readers will remember KB Home being notorious for their mandatory arbitration practices, and for their former CEO Bruce Karatz being booted for shady stock options scams. Given that the company's reputation as a homebuilder is generally one of the worst in the business, I'd say they need all the flexibility they can handle.