Del Webb Investor Unloads 20% of Its Stock After Failing to Win Company Board Seat

PHOENIX-An investor in Del Webb Corp., developer of Sun City communities, that lost a contentious proxy fight for board seats just over a month ago has unloaded 20% of its holdings in the company.

Phoenix-based Pacific Partners, headed by a local home builder and former Del Webb executive–among others–sold approximately 20% of its stake in the Del Webb Corp. over the past several weeks.

The investment group sold 192,000 shares for about $25 a share, according to US Securities and Exchange Commission filings. The group now owns a 4.4% stake in Del Webb, below the threshold required for them to report their activities with the stock. Pacific Partners had wanted Del Webb to boost revenues and shareholder value.

“We’re reducing our holdings, but we’re still a major stockholder in the company and are optimistic about the future of Del Webb,” says Pacific Partners principal Garth Wieger in a statement.

Pacific Partners purchased most of the stock for $19 a share last summer. Prior to its divestiture, the company had a 5.5% ownership of Del Webb Corp.

Pacific Partners narrowly lost a proxy fight for two board seats in early November, but the battle forced Del Webb to add two new seats on its board and accelerate announcement of a major redirection in its operations.

On Dec. 6, Del Webb announced a new strategy to boost revenue that calls it to develop smaller communities; partner with outside companies to develop and finance new communities; and offer ancillary products and services, such as homeowner insurance. Del Webb typically builds 10,000-plus homes on parcels of 5,000 acres or more.

Stockholders have been nonplussed with the performance of Del Webb shares, which have not kept pace with the broader market for the past two years, and are down more than 18% from a 1998 peak. The stock rose to nearly $29 in October after homebuilder J.F. Shea Co. announced it was attempting a hostile takeover for $30 a share. That bid, never seriously considered by Del Webb’s board, was later dropped and the stock dropped back down to the $24 to $26 range.

The stock rose after the Dec. 6 announcement of the new strategy, climbing to more than $31 a share, but lost $2 a share on Wednesday, closing at just over $27.