Homebuilder McCarthy & Stone to go private in £630 million deal

US property investor Lone Star has launched a bid to buy retirement housebuilder McCarthy & Stone, becoming the latest private equity firm seeking to take advantage of discounts to listed UK property companies.

The offer of £630m values McCarthy & Stone at £1.15 a share, a premium of 39 per cent to Thursday’s closing price of 83 pence, but still well below pre-pandemic levels. In mid-February, the housebuilder’s shares were trading at £1.58.

“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,” said Donald Quintin, president of Lone Star Europe.

Lone Star is the latest in a series of major US investors to have capitalised on tumbling share prices by snapping up portions of, or entire, companies. Brookfield, the Canadian asset manager, has been building a stake in British Land, one of the UK’s largest commercial landlords.

Last month, KKR, the private equity firm, took a 5 per cent stake in Great Portland Estates, a FTSE 250 landlord.

McCarthy & Stone directors are unanimously recommending shareholders vote in favour of the bid.

“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,” said Paul Lester, chairman of McCarthy & Stone.

Source: Financial Times