Lone Star Real Estate’s agreed offer for one of the UK’s pioneers of retirement living, McCarthy & Stone, further demonstrates the strong demand for alternative property investments and the attractions of housing for the elderly. The bid values the company at £630 million.
Lone Star, which is buying the company on behalf of its Lone Star Real Estate Fund VI, has offered 115p per share which represented a 38.6% premium on the closing price of shares on 22 October, and 57.3% on the three month volume-weighted average of 73.1 pence per share.
McCarthy and Stone’s directors unanimously agreed to recommend that shareholders accept the bid and said they believe Lone Star will be a complementary partner.
In a statement Lone Star president Donald Quintin said that McCarthy & Stone is an attractive opportunity, “in a market underpinned by clear fundamentals – a rapidly aging population and a structural undersupply of suitable housing options for older people.”
McCarthy & Stone has been hit by the Covid pandemic which meant the closure of sales offices and completions were slowed. At the half year, it had made an underlying operating loss of £24.8 million although this compared to underlying operating profit of £21.3 million at the same point last year.