NEW YORK - Less than two months out of bankruptcy, a small homebuilder says it is entertaining acquisition offers -- which could mean its bigger rivals are facing a shortage of land.

Half of the 10 largest U.S. builders have expressed interested in buying Woodside Homes outright or in purchasing some of its land, said Chief Executive Officer Joel Shine.

Shine, who would not name the interested parties, said neither Woodside nor its lots are not for sale. The company was the 20th-largest builder in 2008.

The big publics have a problem, Shine said. They have been focusing on generating cash, but at one point you wake up and realize you have a lot of cash and no land to build homes on.

Some analysts agree.

If they're willing to buy a private homebuilder, they're trying to buy finished lots, said Citi analyst Josh Levin. That tells you about the lack of land at good prices.

UBS analyst David Goldberg has written that competition for land could squeeze builders' margins as prices rise.

North Salt Lake, Utah-based Woodside might even mount a public offering of its own, Shine said.

An appetite for such an offering may well exist, said Steven Friedman, who runs the homebuilding practice at accounting firm Ernst & Young and has noticed a fair sense of optimism for homebuilder stocks among institutional investors.

In January, Beazer Homes USA Inc (BZH.N) announced a secondary offering of 19.5 million shares, and closed it a week later at 22.4 million, reflecting strong investor demand.

Meanwhile, the Dow Jones U.S. Home Construction Index .DJUSHB has risen about 24 percent since early April.

Of course, investors already can choose from smaller, publicly traded builders, such as Meritage Homes Corp (MTH.N) and M/I Homes Inc (MHO.N), which, like Woodside, closed on about 2,000 homes in 2008.

They trade by almost any metric at discounts to their big peers, Stifel Nicolaus analyst Mike Widner said.


Whether or not Woodside goes public, its emergence from bankruptcy is a sign of recovery, said Ernst & Young's Friedman.

Homebuilding peers such as publicly traded TOUSA Inc (TOUSQ.PK) and privately held Kimball Hill Homes are liquidating instead of reorganizing. But Woodside's former creditors, now its new owners, made a different decision.

Letting the company live gave the lenders a better recovery than if it died, Friedman said. That's an indicator that the worst is over.

During the housing industry's protracted downturn, production dropped to the point where there are only 2.1 empty new homes per 1,000 households, a level that should finally clear the field for new building, said Morningstar analyst Eric Landry.

Woodside's two biggest stakeholders are JPMorgan Chase & Co (JPM.N), with 11.7 percent, and John Hancock Life Insurance Co, a part of Manulife Financial Corp (MFC.TO), with 9.9 percent. Neither could be reached for comment.

Going into bankruptcy in September 2008, Woodside had about $686 million in bank and note holder claims. Coming out, at the end of 2009, it had $315 million in restructured debt. It has between $150 million and $200 million in cash.

The company has about 80 projects under construction now, mostly in California, Arizona and Nevada. It plans to build about 1,700 homes in 2010, the same number it did in 2009, but Shine declined to give a profit forecast.

He sees Woodside's competition as foreclosures and big public companies surviving by churning out volume. His strategy: turning Woodside's small size to its advantage by emphasizing speed and responsiveness.

Woodside, for example, can turn out entry-level homes faster, and it can handle a higher degree of customization on its more expensive products, Shine said. Woodside can deliver homes in about a month and a half -- even faster than the 99-day turnaround Meritage has been touting recently.

In every downturn it becomes public knowledge that the public builders will triumph and the private builders will go away, he said. But (public builders) still make up only a third of the market. (Reporting by Helen Chernikoff; Editing by Lisa Von Ahn)