Reubens to sell Chunk of McCarthy & Stone stake

03 March 2007 - Financial Times

David and Simon Reuben, the property entrepreneurs, are poised to sell a significant chunk of their stake in McCarthy & Stone, builder of retirement homes.

It is understood that the Bombay-born brothers, who are among London’s most active real estate investors, are set to sell part of their 32 percent stake in the company.

HBOS, the Reuben brothers and Sir Tom Hunter bought McCarthy & Stone last year for 1.1bn after a bidding battle with Permira and Barclays Capital.

Now the consortium plans to sell half its £300m equity stake in the business at a small premium.

HBOS, which led the consortium with much of the debt and 58 percent of the equity, will slash its stake to 20 percent.

The Reuben brothers will cut their stake to 20 percent.

Sir Tom Hunter, the Scottish entrepreneur, will maintain the level of his ownership at about 10 percent.

The partners are selling down because HBOS does not want to keep the business on its balance sheet, which it would have to if it maintained more than 20 percent.

One obvious buyer for the stake had been Vincent Tchenguiz, the property entrepreneur, who was expected t make a rival offer last autumn.

Mr Tchenguiz instead struck a deal that gave him the rights to ground rents and management fees from new McCarthy & Stone schemes.

It is understood that Mr Tchenguiz has walked away from talks with the consortium. However, Nick Leslau, another real estate investor who often works with Sir Tom, is amongst other potential bidders for the £150m-plus stake.

Meanwhile, HBOS and Sir Tom are bidding for Crest Nicholson, the housebuilder.

This week, the pair extended to next Wednesday the deadline for the £713m agreed bid, which had been due to expire six weeks after it was launched in mid-January.