US private equity giant Lone Star has made an offer to acquire McCarthy & Stone in a deal that values the UK retirement housebuilder at around £630 million.
Bidco, a indirect subsidiary of Lone Star Real Estate Fund VI, has proposed a 115p per share offer for the business which specialises in land buying, developing, selling and managing retirement communities, mostly for people in their late seventies, although buyers start from 65.
That represents a premium of 38.6% to the closing share price of 83p at October 22.
Donald Quintin, president, Lone Star Europe, said McCarthy, which is led by John Tonkiss, “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”.
McCarthy & Stone directors, advised by Rothschild & Co and Deutsche Bank, consider the terms of the deal to be fair and reasonable.
They intend to recommend that shareholders vote in favour of the offer.
Paul Lester, chairman of McCarthy & Stone, said: “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.”
He added: “We believe that Lone Star would provide a complementary partner for McCarthy & Stone's stakeholders and along with the investment in the business that Lone Star can provide, will enable further improvements of its transformation strategy and allow McCarthy & Stone to capitalise on its growing rental and multi-tenure offering which would underpin the long-term growth of McCarthy & Stone."
More to follow...