The vote was never in doubt, since Stuart R. Miller, LNR chairman, and members of his family controlled better than 75% of the shares. However, the vote passed with the approval of nearly 90% of shareholders. Each outstanding share of LNR stock is redeemable for $63.10 in cash. Steve Bjerke, corporate controller, tells GlobeSt.com that Cerberus paid approximately $1.9 billion in stock purchases and assumed approximately $1.9 billion in debt.

As a result of the transaction, LNR becomes an indirect, wholly owned subsidiary of LNR Property Holdings. According to the proxy statement issued to stockholders, Cerberus owns 75% of LNR Property Holdings; the Miller family owns 20.4%, and company managers/investors own 4.6%. Current management, including CEO Jeffrey Krasnoff and CFO Shelly Rubin, is expected to remain in place.

Bjerke would not comment on the benefits to LNR of taking the company private. However, according to the proxy statement, they include the potential for implementing tax strategies not available to public companies. Those could include dividing the company into real estate ownership, real estate investment management and a REIT. Greenhill & Co., LLC, financial advisor to LNR, includes projections for these possibilities in the proxy statement.

Other benefits include the ability to make longer-term investments that may not meet the quarterly demands required of a public company, and the opportunity to ensure shareholders of cash in excess of the highest price paid for LNR stock prior to announcement of the merger. In fact, LNR shares traded at $55.28 a share on Aug. 16 and rose to $63.69 a share on Aug. 30, following the announcement of the intended merger. The proxy statement also noted that the three major debt rating agencies had told LNR that unless it adhered to strict limits on its debt-to-equity ratio, they would lower ratings, which would result in increased borrowing costs.

LNR was spun off from Lennar Corp., a homebuilder, in 1997. For the year ended Nov. 30, LNR reported profits of $126.2 million, a 15% increase over the previous year. The Cerberus transaction is expected to close any day.