Global investment firm, Lone Star, has made a cash offer to acquire retirement housebuilding giant, McCarthy & Stone, for approximately £630m.
According to reports, the board of McStone said it supported the offer at 115p per share, which represents a premium of 38.6% to its closing share price of 83.0p as of October 22 2020.
Lone Star said the acquisition represented an “attractive opportunity” to gain exposure to the retirement living sector. It added that it recognised McStone’s progress in implementing its strategy “to become the UK’s leading developer, owner and manager of retirement communities with best in class customer satisfaction rating”.
McStone’s directors, advised by Rothschild & Co and Deutsche Bank on the financial terms of the acquisition, said they considered them “fair and reasonable”.
McCarthy & Stone has seen Covid-19 have a “significant impact” on its financial performance, with legal completions down 44% during its half-year to April 30, 2020, and the company making a pre-tax loss during the period.
Paul Lester, McStone’s chairman, said: “The McCarthy & Stone directors believe that the offer from Lone Star represents fair value for shareholders and unanimously intends to recommend the offer.
“The all-cash offer represents a compelling and attractive opportunity for shareholders to realise and crystallise their investment in McCarthy & Stone in the near term and also provides a meaningful premium to the prevailing share price notwithstanding the backdrop of the wider risks posed by the political and macro-economic environment.”
Donald Quintin, Lone Star Europe’s president, said: “As a leading developer and manager of retirement communities in the UK, McCarthy & Stone represents an attractive opportunity in a market underpinned by clear fundamentals: a rapidly ageing population and a structural undersupply of suitable housing options for older people.
“Lone Star shares the McCarthy & Stone management team’s vision for growth. With our proven experience in developing property-related businesses, we believe our partnership will enable McCarthy & Stone to accelerate its transformation, which aligns with the government’s goal of increasing the supply of attractive housing options in the UK.”