The UK's biggest builder of retirement homes backed a takeover offer valued at more than £1 billion.
McCarthy & Stone said the approach from funds advised by Barclays Capital and private equity firm Permira represented a good deal for shareholders.
However, it also emerged yesterday that another consortium had put a proposal valued at about £1.06 billion to the McCarthy board.
The rival move involves West Coast Capital, the private equity business headed by retail tycoon Sir Tom Hunter, and compares with £1.03 billion on the table from Permira.
The West Coast consortium, which also features Bank Of Scotland, has told McCarthy that it expects to complete due diligence shortly and that it would then be in a position to make a further proposal.
The possible deal, which would value McCarthy at £10.30 a share compared with £10 from Permira, is still subject to a number of pre-conditions.
McCarthy chairman Keith Lovelock said the deal with Permira and Barclays Capital represented the best offer on the table.
He said: "Compared with the other approaches we have received, we believe the offer provides certainty for shareholders and the company at a value which fairly reflects the strength inherent in the business."
Mr Lovelock added the offer represented the culmination of a period of value creation for shareholders, with returns of 280 per cent since September 2001.
McCarthy - which has a number of projects on the go in the Midlands - is responsible for about 60 per cent of retirement homes built in the UK.
It said in November that annual profits fell 14 per cent after the toughest housing market it had seen in years.
But yesterday McCarthy's shares surged by 10.9 per cent in early trading to 1045.5p giving the company a market value around £1.07 billion.
Analysts said the bidding interest was good news for the wider housebuilding sector as some predicted a bid battle ahead.
Bridgewell analyst Chris Millington said: "On the basis of the second approach we would not rule out an auction for the stock, in which case this would push the shares beyond the £10.30p approach."
McCarthy & Stone said on June 2 it had received approaches that could lead to an offer. Its shares have risen by a quarter since then.
The company has a regional office employing about 50 people at Coventry and has developments at a number of West Midland locations, including Aldridge, Droitwich, Stourbridge, Mere Green, Selly Oak, Streetly and Tamworth.
McCarthy, which last year named a retirement development after pop singer Cliff Richard in his home town of Cheshunt in Hertfordshire, has had offers before.
In July 2003, John McCarthy, the firm's founder and former chairman, called off an approach the McCarthy family had made after balking at 520p a share.
The company builds homes which usually provide 24-hour security and its charges cover the cost of maintenance, water rates, window cleaning and heating.