Shares in the London-listed firm rose 2.4% at 0833 GMT to 118.6 pence, below the new 120 pence per share offer, as the company said its board plans on unanimously recommend the deal to its shareholders.

McCarthy & Stone said the increased offer, which represents a 3.6% premium to its stock's closing price of 115.8 pence on Friday, would help it continue growing its shared ownership offering and access finance from private capital.

The increased offer comes weeks after the company reported that its annual revenue slumped nearly 73% to 197 million pounds as the retirement housing markets deals with increasing COVID-19 infection rates and government lockdown measures in the UK.

"Current trading increasingly affected by rising COVID-19 infection rates and government lockdown measures", McCarthy & Stone said in its statement on Nov. 11.

The company swung to a loss in the first half of 2020 as COVID-19 restrictions on housing transactions slashed its number of completed sales.

The acquirer, Mastiff Ltd, is a unit of real estate-focused Lone Star Funds.

(Reporting by Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur)