…. The sale of individual homes does not provide the certainty of cash flow required by the equity markets. I’ve said before, it appears as though the Developer (and those that have a say in the family) are setting up The Villages for an Initial Public Offering, making it a public company.
With ownership of the company now in it’s fourth generation, the internal family stresses and strains have to be difficult. Taking TV public, giving the various family members “their share” in newly issued shares solves the problem. They will have “cashed out” and would have several options…
- They could sell their shares, resign their positions in TV management and retire to a luxurious vacation.
- They could decide to try to increase their ownership share by buying out other family members who might not want to continue as “the Developer”.
- The whole ownership structure of TV could change if an outside investor, like a large home builder or a financial investor, consolidated ownership by gaining majority control by buying a majority of the public shares.
It’s only my opinion, of course, but it appears to me that the Developer is setting up the structural cash flows to set up an initial public offering of the ownership of The Villages.