McCarthy & Stone, the retirement homes specialist, has entered talks with more than one party to sell the business.
The company said in a statement to the stock exchange that it had "received approaches that may or may not result in an offer for the company". One of the potential bidders is thought to be a private equity group, and the likely sale price is understood to be about £1bn.
City sources said this week that it was more likely to be in talks with private equity groups than one of the volume housebuilders because of the high price of the company, and the fact that there would be few if any synergy benefits for housebuilders. It is understood that Barratt is not one of the parties involved and Persimmon is thought an unlikely suitor because it bought Westbury for £500m five months ago.
Keith Lovelock, McCarthy & Stone's chief executive, declined to comment on the talks but is understood to be taking the approaches seriously. The statement however said that any deal would be subject to a "number of pre-conditions, including due diligence", which would suggest that talks were not at an advanced stage.
Paul Pedley, deputy chairman at housebuilder Redrow, said: "It is quite a unique firm. A housebuilder couldn't get the synergies that Persimmon got from the Westbury deal. It would be difficult to cut overheads."
It is quite a unique firm. A housebuilder could not get the synergies that Persimmon got from the Westbury deal
Paul Pedley, deputy chairman, Redrow
Two years ago, John McCarthy, the founder and former chairman of the company, failed in a buyout attempt and a row then ensued over £190,000 of share options.
According to sources close to McCarthy's sons, Spencer and Clinton, who run Churchill retirement homes, they are not bidding for the company.
Shares in the company rose 15% to 907.5p after the announcement on Friday, although they had dropped to 855p late on Tuesday.