By Matt Scuffham
LONDON (Reuters) - British housebuilder McCarthy & Stone said it plans to list on the London Stock Exchange to help fund a 2.5 billion pound ($3.8 billion) investment in land and construction projects in the next four years.
McCarthy & Stone is Britain's biggest builder of homes for retired people, with a 70 percent share of the market. It hopes to use its size to take advantage of a shortage of such housing in Britain when the average age of the population is rising.
Chairman John White said that around 3.5 million Britons are interested in buying a retirement property, but only 128,000 properties had been built as of April 2014.
"McCarthy & Stone is in a unique position to address the unprecedented market opportunity we see before us," he said in a statement on Wednesday.
The company is expecting to raise 70 million pounds from new investors through an IPO which is likely to take place in November. Existing shareholders will also sell shares to ensure that at least 25 percent of the shares will be actively traded.
One source familiar with the sale plan said the company hopes to have a valuation in excess of 1 billion pounds.
The company was previously listed in London for 22 years before being taken private through a 1.1 billion pound deal in 2006 by a consortium led by Halifax Bank of Scotland and including Scottish businessman Tom Hunter and the Reuben brothers. It was later taken over by a consortium of private investors including Goldman Sachs (N:GS) and TPG (TPG.UL).
Goldman and private equity investors TPG, Anchorage Capital and Strategic Value Partners currently own about 57 percent of the company with the remainder held by 26 unidentified smaller investors.
SALE TALKS FIZZLE
Chief Executive Clive Fenton said it decided to launch an initial public offering (IPO) after talks over an outright sale came to nothing.
"We've been approached by a number of interested parties over the past year. The talks didn't develop. Our view is the place for this company is on the London Stock Exchange," Fenton told reporters.
Sky News reported in September that private equity firm Bridgepoint [BRDG.UL] was in talks to buy the business in a deal valuing it at more than 850 million.
British payments processor Worldpay (L:WPG) joined the London Stock Exchange on Tuesday in an initial public offering valuing the company at 4.8 billion pounds ($7.4 billion), the biggest flotation in what had been a lacklustre year for listings in Britain.
McCarthy & Stone made a pretax profit of 88.4 million pounds in the year to Aug. 2015, on revenue of 486 million.
It was the first British developer to offer owner-occupied retirement housing in 1977 and has since sold around 50,000 homes in more than 1,000 developments across Britain.
Deutsche Bank (DE:DBKGn) is acting as sponsor, joint global co-ordinator and joint-bookrunner for the IPO. Goldman Sachs is acting as joint global co-ordinator and bookrunner.
(This story corrects paragraph 7 to say company was taken private by HBOS led-consortium in 2006)