Quintain has announced agreement on the terms of a sale to Bidco, owned by Lone Star, in a move that will accelerate development of its multibillion-pound Wembley Park scheme.
Under the terms of the offer, Quintain shareholders will receive 131p in cash for each share, which values the company at about £700m.
Quintain’s directors intend unanimously to recommend that shareholders accept the offer.
The deal is expected to speed up the delivery of its £2.1bn Wembley Park development, which it has planning for 5,500 homes.
The developer has 835 homes under construction and intends to complete 1,200 within the next four years. Of these, 361 homes will be for market rent.
Quintain said Bidco’s “significant financial resources” would help with the delivery of 850 new homes on the South West Lands and the redesign of the entire eastern half of the site, which totals 24.5 acres.
Lone Star was established in 1995, and has since organised 15 private equity funds (the LS Funds), with aggregate capital commitments totalling approximately $60bn (£38bn).
Bidco intends to finance the offer through a mixture of funding provided by Lone Star Real Estate Fund IV and debt funding from third-party providers of debt finance.
Angus Dodd of Lone Star Europe Acquisitions LLP said: “We intend to contribute significant additional financial resources to help Quintain in its next phase of growth: to accelerate delivery at Wembley Park, building more homes more quickly and continuing the creation of a cohesive and exciting new community.
“We very much look forward to working with the Quintain team on Wembley and the rest of the portfolio.”
Quintain chairman William Rucker said: “The offer by Bidco delivers an attractive opportunity to unlock future value from the Wembley Park development at an early stage through the certainty of a cash offer priced at a premium to net asset value and the current share price.
“Bidco’s offer enables our shareholders to accelerate and de-risk the realisation of value and recognises the transformation of Quintain over the last six years.”
For the 12 months ending 31 March 2015, Quintain had a turnover of £57.7m, reported net rental income of £21.6m, profit after tax of £37.9m and adjusted profit of £6.2m.
Assets at Wembley Park make up 80 per cent of Quintain’s portfolio.