Yes, but a guarded yes, seems to be the answer from Liberum.
Pointing out the agreed bid from Lone Star “may be a one-off given the long-term attractions of retirement housing”, the City broker it said also sees “parallels from history [that] suggest wider repercussions”.
In summary, Liberum reckons the smaller industry constituents have been overlooked and the bid should “improve sentiment” towards them.
“Two Bank of England meetings between now and the end of the year could usher in negative interest rates, which would be positive for the sector,” it adds.
“Admittedly, in the last cycle, land was hard to find in the open market, so buying other companies was a way for housebuilders to increase their land holdings, and this dynamic is absent this time around,” explains Liberum.
“However, at the very least, we would expect this bid to put a floor on valuations across the sector.”
In a round of house-keeping, UBS moved its recommendation to ‘hold’ from ‘sell’ on McCarthy & Stone Monday, while upping its valuation to the offer price of 115p a share, as did Barclays Capital, which moved its stock call to ‘equal-weight’.