WCI Communities board urges shareholders to reject Icahn's $22-per-share tender offer

By Lisa Kerner

Charlotte, N.C., April 5 - The board of directors of WCI Communities, Inc. unanimously recommended that shareholders reject the unsolicited $22.00-per-share tender offer by Carl Icahn affiliates by not tendering their shares.

The board determined that the offer is "highly conditional, opportunistic and inadequate from a financial point of view to the company's shareholders," according to a company news release.

"We reached this conclusion after carefully considering the tender offer price and terms, as well as the advice of our financial and legal advisers," board chairman Don E. Ackerman said in the release. "Under the circumstances, the board exercised its fiduciary duty to all shareholders to maximize value and has initiated a comprehensive sale process with the assistance of Goldman Sachs."

In a letter to shareholders, the board outlined its reasons for not recommending the offer:

• The Icahn group's offer is not in the stockholders' best interests but rather, highly advantageous to the Icahn group;

• The board feels the Icahn group's offer does not protect WCI's shareholders and does not sufficiently address the potential impact of a change of control on the company's debt;

• The offer is inadequate and fails to recognize the value of the company's real estate assets brand reputation;

• The Icahn group's premium of 16% is well below the average premium paid of 28% in all-cash transactions from 2004 to 2006;

• The offer is predicated on 14 conditions in total, which creates significant uncertainty;

• The Icahn group has not presented any plan or proposal suggesting it will deliver superior value to all shareholders; and

• Icahn's tender offer, which is slated to end at midnight ET on May 18, is conditioned in part on removal of the "poison pill" adopted by the board and certain other conditions.

The board said it has begun a comprehensive sale process designed to maximize value for all shareholders pursuant to which all potential buyers, including the Icahn group, will be treated equally, without unfair advantages provided to any buyer.

Carl Icahn affiliates Icahn Partners LP, Icahn Partners Master LP, Icahn Partners Master II LP, Icahn Partners Master III LP and High River LP announced their plan to hold the tender offer on March 13.

WCI is a Bonita Springs, Fla., builder of master-planned lifestyle communities.

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