BFC currently owns approximately 17% of Levitt, consisting of all of Levitt's Class B common stock and approximately 11% of the company's Class A common stock. Under terms of the merger, holders of Levitt's Class A common stock will receive 2.27 shares of BFC Class A common stock. Based on BFC's closing stock price of $6.35 on Jan. 30, the transaction values each share of Levitt's Class A common stock at $14.41, which represents an approximately 32% premium over market on that date. The merger agreement has been approved by the special independent committees, which researched the merger, and boards of directors of both companies.

With the merger, Levitt will address its debt-to-total capitalization ration, which was 63% as of Sept. 30. The combined company will have a pro forma capitalization of approximately $466 million. "This transaction provides Levitt additional strength and resources during a very challenging time," Levan says. "BFC, in turn, increases its investment in a company with a tremendous past and a bright long-term future when the housing markets return to favor."

Levitt consists of homebuilding company Levitt and Sons, LLC; land development company Core Communities, LLC; and timeshare operator Bluegreen Corp. BFC is a holding company that invests in public and private companies.

After the merger is completed, Levan will continue as CEO of BFC and Levitt and the tow companies' boards will combine and total 13 directors. George Scanlon, who is presently CFO of Levitt, will become CFO of BFC later in the year after current CFO Glen Gilbert retires.

Sandler O'Neill & Partners LP acted as exclusive financial advisor to BFC and Houlihan Lokey Howard & Zukin acted as exclusive financial advisor to Levitt's special committee.