Description of the Proposed Transfer of Control
Valencia is a Commission-regulated Class A water company and is a wholly owned subsidiary of the Newhall Land and Farming Company (Newhall). Valencia provides service in the Santa Clarita Valley area of Los Angeles County.
Newhall is a California limited partnership with its principal place of business in Valencia, California. Newhall owns substantial agricultural property in Madera and Ventura counties, but its primary activity is real estate development. Newhall founded Valencia to provide water service in certain of its developments.
LandSource is a joint venture between LNR and Lennar, with each owning, directly or indirectly, a 50% interest in Newhall and, thus, Valencia. LNR and Lennar are in the business of real estate investment and management, and are more fully described in D.04-01-051.2
Cerberus is a Delaware limited partnership with its principal place of business in New York, New York. It is a global private investment firm that, through its affiliates, manages more than $14 billion in capital. At the conclusion of the proposed transfer of control, Cerberus, through corporate intermediaries, the Miller3 Family trusts and partnerships, and interests owned by LNR executives will indirectly own LNR, the indirect owner of 50% of Valencia. Applicants state that the overall transaction is valued at approximately $4.2 billion. The proposed lines of ownership and control are set out in Attachment B to today's decision.
2 To enable Cerberus to complete its acquisition of LNR prior to Commission approval of the change of control in Valencia, LNR temporarily transferred its indirect 50% control of Valencia to Lennar, the Commission-approved owner of the other 50%. This is the interim agreement discussed above (Question 2 to applicants). With today's approval of the Riley/LNR transaction, the 50% control reverts to Riley. 3 Prior to the consummation of the transaction, Stuart Miller was the Chairman of LNR's Board of Directors, and personally and through family owned entities, owned sufficient interests in LNR and Lennar to give him effective voting control of both companies.
