Kaufman & Broad Agrees to Acquire J.M. Peters Control : Home building: The federal Resolution Trust Corp. sponsored a bidding contest for the negotiating rights. The founder of Peters lost.

NEWPORT BEACH — In a move that bolsters its new reputation as one of the West’s most aggressive home-building firms, Kaufman & Broad Home Corp. said Wednesday that it has entered a preliminary agreement to acquire controlling interest in J.M. Peters Co.

K&B; officials were on a stock-selling trip and unavailable to elaborate on the terse announcement issued from the company’s Los Angeles headquarters.

Kaufman & Broad, a major publicly traded home builder with operations throughout Southern California and in France, reportedly beat out J.M. Peters Co. founder James Peters for the negotiating rights in a bidding contest sponsored by the federal Resolution Trust Corp.

The agency inherited its stake in J.M. Peters Co. last year, when federal regulators assumed operation of San Jacinto Savings & Loan Assn. of Houston, the previous majority owner.

Peters confirmed that Kaufman & Broad had been selected by the RTC but said he would have no other comment “because I don’t know anything about the deal at this point.”

Kaufman & Broad, known for building basic homes at relatively affordable prices, has been trying to upgrade its image. Last year it formed a new division, Vintage Communities in Newport Beach, to give it entree to the upscale market of homes priced above $250,000.

The Peters acquisition would complement that move because Newport Beach-based Peters Co. is considered the premier upscale home builder in the West.

“It would be a positive move for the Peters projects that are in the works, and probably a great opportunity” for Kaufman & Broad to expand Vintage, said Bruce Akins, chairman of Akins Development Corp. in Irvine.

“And I expect we will see Jim Peters out there aggressively competing,” he said, “either as part of Kaufman & Broad or with a new company of his own.”

Because it has been successful in raising money through public offerings in recent years, Kaufman & Broad is considered one of the best-financed home builders in the country these days.

It has been aggressively pursuing land acquisitions in a bid to boost its market share, as housing sales pick up from the moribund pace of the last two years.

If successful in buying the Peters Co., Kaufman & Broad will pick up residential land in Orange, Riverside, San Diego, Los Angeles and Ventura counties. The Peters Co. recently placed the value of its land and homes under construction at $260 million.

“It certainly does show that publicly traded housing companies do have the ability to move forward with transactions, where lots of other companies cannot find the financing in today’s market,” said Bob Albertson, president of Newport Beach-based Presley Co. of Southern California.

Larry Webb, president of A-M Homes of Southern California and a former division president with Kaufman & Broad, said the announcement caught him completely by surprise.

“I just can’t believe it,” he said, “but it is consistent with what K&B; has been doing. They have financial strength and are using it to acquire assets to improve their market share.”

Industry insiders said they expect the RTC-K&B; talks to center on disposition of J.M. Peters’ debt of more than $200 million. Other issues will undoubtedly include the value of the company if Peters declines to remain chairman under Kaufman & Broad’s ownership, and use of the J.M. Peters name if he does not.

Kaufman & Broad said in its announcement that it anticipates paying less than book value to acquire about 12 million shares of Peters Co. stock, but it did not specify the current book value.

As of its last financial statement, for the fiscal 1992 third quarter ended Nov. 30, Peters had a book value of $1.82 per share, according to Mark Matheson, director of research for Cruttenden & Co., an Irvine investment banking firm.

But if the RTC agrees to hold back a big chunk of that debt--and one source said Kaufman & Broad’s proposal calls for the agency to keep about $100 million of it--that would increase the book value dramatically.

The price of the remaining 1.96 million shares of the company’s stock traded on the American Stock Exchange has bounced from $1 to $4.50 a share in the past year and closed at $3.75 on Wednesday, down 13 cents for the day.

The Peters Co., founded in 1975, has been a major and early influence in Southern California housing design and pricing.

James Peters positioned the company early as the region’s leading builder of upscale homes.