Lennar Corporation has set the final exchange ratio for its offer to trade its approximately 20% stake in Millrose Properties, Inc. (MRP) for Lennar Class A common stock. The ratio is 4.1367 MRP shares for each Lennar share tendered, allowing Lennar shareholders to receive 4.1367 MRP shares per Lennar share they exchange.
The exchange mechanism gives Lennar shareholders a clear exit path: for every Lennar share they tender, they receive 4.1367 shares of Millrose. The offer can accept up to 8,049,596 Lennar shares if fully subscribed, with proration applied if the offer is oversubscribed. The offer expires at 12:00 midnight, New York City time, on November 21, 2025, and is contingent on the Securities and Exchange Commission declaring the registration statement effective before that date.
Lennar’s decision comes after a challenging Q3 2025 earnings period. Net earnings attributable to Lennar fell to $591 million, or $2.29 per diluted share, down from $1.20 billion ($4.26 per diluted share) in Q3 2024. Gross margins on home sales contracted to 17.5% from 22.5% year‑over‑year, driven by lower revenue per square foot and higher land costs, while new orders grew 12%. The company’s management highlighted the need to control costs and focus on core homebuilding operations amid a tightening housing market.
The exchange offer is part of Lennar’s broader strategy to become a more asset‑light, land‑light homebuilder. By divesting its remaining Millrose stake, Lennar aims to simplify its balance sheet, reduce exposure to land acquisition costs, and sharpen its focus on core residential construction. The move follows a February 2025 spin‑off that distributed 80% of Millrose shares to Lennar shareholders, leaving Lennar with a 20% holding that it now seeks to unwind.
Investors have responded positively to the announcement, viewing it as a step toward a more focused, asset‑light strategy. Analysts have noted that while the spin‑off could temporarily weigh on Lennar’s earnings, the long‑term benefits of a streamlined structure are expected to outweigh short‑term headwinds.
The offer remains open until midnight on November 21, 2025, and will be subject to SEC registration effectiveness. Lennar has indicated it could accept up to 8,049,596 shares, with proration applied if the offer is oversubscribed. The exchange ratio and terms are now finalized, completing the last phase of Lennar’s divestiture plan for Millrose.
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