Prescott Group wants Levitt to abandon rights offering

By Lisa Kerner

Charlotte, N.C., Sept. 18 - Levitt Corp. investors led by Prescott Group Capital Management, LLC demanded the company's board members "exercise their fiduciary [duty] to abandon Levitt's currently proposed coercive rights offering" in favor of non-dilutive financing.

Prescott made the demand in a Sept. 14 letter included in a schedule 13D filing with the Securities and Exchange Commission. The reporting persons own 2,641,276 shares, or 14.2%, of Levitt's outstanding stock.

According to Prescott, "many of the minority holders of Levitt shares will be economically unable to participate in this offering and are thus required to effectively sell 5/6th of each share they own for the price of $2.00," an amount considered inadequate.

In addition, Prescott said "the alleged benefit to the corporation is far from compelling" because Levitt's recently filed form S-3 "candidly admits that the proceeds from this financing may not even be used in the troubled Levitt & Sons building subsidiary."

On Aug. 27, Levitt announced a subscription price of $2.00 for its proposed rights offering of up to 100,000,000 shares of its class A common stock.

It was previously reported that BFC Financial Corp. terminated its merger agreement with Levitt in the belief that closing conditions could not be met. Levitt's board decided to proceed with a previously announced rights offering with participation by BFC, a Fort Lauderdale, Fla.-based private investment firm.

Levitt is a homebuilding and real estate development company based in Fort Lauderdale, Fla.

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