US private equity fund Lone Star has swooped on retirement housebuilder McCarthy & Stone with a £630m bid, as it seeks to gain exposure to the retirement living market.
The fund has offered investors in the Bournemouth-based company 115p per share, representing a 39pc premium to their closing price on Thursday.
Shares soared by more than two-fifths to 118p in early trading. The stock had fallen 44pc this year prior to the bid.
Paul Lester, McCarthy & Stone's chairman, said the all-cash offer "represents a compelling and attractive opportunity for shareholders to realise and crystallise their investment".
He added that the bid "provides a meaningful premium to the prevailing share price notwithstanding the backdrop of the wider risks posed by the political and macro-economic environment".
Lone Star is looking to move into the market to take advantage of its "clear fundamentals", namely a rapidly ageing population and a "structural undersupply" of suitable housing options for older people.
Donald Quintin, president of Lone Star Europe, said: "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."
Last month, the fund dropped out of the race to buy Asda as it was unable to match the price sought by Walmart, the supermarket's owner.
Directors at McCarthy & Stone said they intended to recommend unanimously that shareholders vote in favour of the proposal.