McCarthy & Stone linked with private equity takeover bid

By GRAEME EVANS
Published on 04/03/2013 00:00

Retirement homes developer McCarthy & Stone has become a £500 million bid target for one of Saga’s private equity backers.

CVC was yesterday reported to be working on the potential approach with Norwich City Football Club chairman Alan Bowkett – a veteran dealmaker who has served at the helm of a number of companies including housebuilder Redrow.

The interest comes after the company’s investment bank advisers recommended that McCarthy considers either a sale of the business or a refinancing in order to tackle £500m of debt that is due in April next year.

Bowkett, who is also chairman of Italian aerospace company Strix, resigned from the builder’s board last week in order to avoid a conflict of interest over the CVC approach.

McCarthy sold almost 1,400 properties last year but sources close to the bid believe that an equity injection and lower debt would get it back to pre-financial crisis levels, when it sold more than 2,300 homes in 2007.

While CVC is one of the three private equity firms that control Acromas, owner of the over-50s group Saga, there is not thought to be any link between Saga and CVC’s interest in McCarthy & Stone.

There has been a pick-up in confidence in the housebuilding sector in recent months, with Crest Nicholson making a successful return to the stock market and companies such
as Persimmon and Taylor Wimpey reporting much higher profits.

Bournemouth-based McCarthy was taken private in an ill-fated £1.1 billion deal led by Scots entrepreneur Sir Tom Hunter and billionaire brothers David and Simon Reuben in 2006.

A debt-for-equity swap three years later left the group 25 per cent owned by its lender, Lloyds Banking Group.