American private equity firm Lone Star Funds is looking to buy Britain’s largest retirement home builder McCarthy & Stone, Construction Enquirer has reported.

Dallas-headquartered Lone Star is reported to have made a £630 million cash offer for McCarthy & Stone, which built and sold more than 2,000 houses a year before the Covid-19 pandemic and has a market share of about 70%.

Lone Star Europe president Donald Quintin 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.

“We look forward to partnering with McCarthy & Stone’s management and employees to further support the company’s ongoing transformation.”

McCarthy & Stone chairman Paul Lester added: “The offer represents a compelling and attractive opportunity for shareholders to crystallise their investment in the company in the near term. It also provides a meaningful premium to the prevailing share price notwithstanding the backdrop of the wider risks posed by the political and macroeconomic environment.

“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.”

Estate agent Knight Frank is understood to have advised on the offer.

Date published: October 26, 2020

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