US private equity firm Lone Star has made a recommended offer for McCarthy & Stone which values the Bournemouth-based retirement homes group at £630m.

The bid, by a company indirectly wholly-owned by Lone Star Real Estate Fund VI, is for the acquisition of the entire issued and to be issued share capital of McCarthy & Stone.

The Board of McCarthy & Stone has unanimously recommended the offer of 115p cash per share.

It represents a premium of 38.6 per cent to the closing share price of 83p at October 22 and 57.3 per cent premium to the volume-weighted average price over the three months to October 22.

McCarthy & Stone employs about 2,500 people including approximately 200 at its Bournemouth head office.

Donald Quintin, President, Lone Star Europe, 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.”

Paul Lester, Chairman of McCarthy & Stone, pictured left, said: “The McCarthy & Stone Directors believes 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.

“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.”

McCarthy & Stone is a leading developer and manager of retirement communities in the UK with a significant market share.

The group buys land and then builds, sells and manages retirement developments.

It has built and sold more than 58,000 properties across more than 1,300 retirement developments since 1977 when it constructed its first retirement apartments in New Milton.

McCarthy & Stone has two main product ranges – Retirement Living and Retirement Living PLUS  – which provide mainly one and two-bedroom apartments across the country with varying levels of support and care for older people.

US-based Lone Star was founded by John Grayken in 1995.

Since the establishment of the first fund in 1995, Lone Star has organised 21 funds with aggregate capital commitments totalling more than $85bn.