Friday 23 October 2020 8:24 am

US private equity firm Lone Star to buy developer McCarthy & Stone for £630m

US private equity firm Lone Star has made an offer to buy UK retirement property developer McCarthy & Stone for £630m.

McCarthy & Stone has recommended that shareholders approve the deal, which represents a premium of 38.6 per cent to yesterday’s closing share price of 83p.

The board said the offer represents “fair value” for shareholders, and will put the company in a stronger position amid uncertainty caused by the coronavirus pandemic.

Read more: McCarthy & Stone swings to a loss as completed projects halve

If the takeover gets the green light from investors, McCarthy & Stone’s shares will be delisted from the London Stock Exchange and it will be registered as a private company.

Lone Star warned that it will make job cuts once the company has been taken private as some corporate and support functions will no longer be needed.

Chairman Paul Lester said: “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.”

More to follow