Permira, Barclays bid for UK retirement homes

Permira and Barclays Capital have reportedly made a £900m offer for listed retirement homes builder McCarthy & Stone.

European buyout firm Permira is reported to have partnered with Barclays Capital to make a joint bid for McCarthy & Stone, a UK builder of retirement homes.
 
According to the Financial Times, the Permira bid faces a rival approach by Augusta Capital, an investment vehicle set up by property tycoons Simon and David Reuben, and HBOS. Both bids are believed to value the company at between £900 million and £1 billion (€1.31 billion ; $1.65 billion to €1.46 billion; $1.84 billion ).
 
McCarthy & Stone announced at the beginning of the month that it had received approaches for the company, but did not disclose names. The company said that due diligence was being carried out following the approaches.
 
McCarthy & Stone’s share price at close of trading on Friday 9th June was 864 pence, giving the business a market capitalisation of £887 million.
 
Permira and Barclays Capital declined to comment for this story.
 
The FT said that Permira and Barclays Capital are being advised by Citigroup, with NM Rothschild advising the Augusta Capital/HBOS team.
 
McCarthy & Stone has over 120 retirement homes in the UK, with plans for a further 50 over the next twelve months. According to its website, the business has profit before taxation in 2005 of £127.4 million, a 14 decrease on 2004 figures, and 1,092 employees.
 
Care and retirement homes have proved attractive to private equity in recent years. Earlier this month, The Blackstone Group announced plans to raise up to £275 million from a flotation of UK care homes provider Southern Cross Healthcare, while Barclays Private Equity, the private equity arm of Barclays Capital, acquired care home provider Robinia from European buyout firm Bridgepoint in an £80 million transaction in January.