Bridgepoint May Acquire UK Builder M&S
Bridgepoint, a private equity company, is currently holding acquisition talks with McCarthy & Stone (M&S), the largest builder of retirement homes in the UK.
According to a Sky News report, Bridgepoint is one of the few companies who have placed bids to takeover M&S. One of Bridgepoint’s advisors is Lord Rose, the former chief of Marks & Spencer.
While holding takeover talks with Bridgepoint, M&S is making preparations for a stock market listing, in which the company’s value could turn out to be over £850 million.
Recently, Bridgepoint has been more interested than ever to acquire M&S. The company has also hired bankers to help it successfully conclude the deal.
If the company succeeded in taking over M&S, its investment portfolio would include a chain of restaurants called Ask and Zizzi, Pret a Manger, and the retailer Hobbycraft.
Several months earlier, M&S had invited private equity firms to place their bids. If Bridepoint’s attempts to acquire M&S fail, the company will make an announcement for an initial public offering in the middle of October.
When the government of UK relaxed planning rules to enable the construction of thousands of new retirement homes across the country, several companies such as M&S received a much-needed boost. Housing stock shortage has been bothering the government of UK, and lawmakers have been struggling find solutions to the problem.
Although M&S suffered greatly during the banking crisis of 2008, it reported an increase of 76% in half-yearly pre-tax profits thanks to a increase in sales in early 2015.
M&S was one of the house building companies that were forced to restructure their debt after the financial crisis. But now, the company is planning to invest billions in the construction of new retirement homes.
Once partly owned by Lloyds Banking Group, a state-owned lender, M&S was acquired by an investors’ consortium, including Goldman Sachs, Alchemy Partners, and TPG. In 2006, it was taken over by a private firm for £1.1 billion. Sources say that a float or a sale would put the value of the company close to what its value was before the financial crisis. This means that the company’s present shareholders will make a nice profit.
M&S had recruited a new team of managers last year, chaired by John White, its CEO. White says that the company now aims to purchase land worth £2 billion and construct 12,000 new retirement homes on it over the following four years.