McCARTHY & Stone founder John McCarthy is reportedly assisting sons Spencer and Clinton in their £650m takeover bid for the south based retirement housing group.

McCarthy & Stone chairman John McCarthy - who owns 13 per cent of the group - is said to have already secured backing from a financial institution.

His sons previously worked at McCarthy & Stone, before in 1994 setting up Ringwood based Churchill, known as Emlor until this March.

McCarthy & Stone, which has a number of developments in Southampton and on the Waterside, announced on Friday that it had received an approach which may or may not lead to an offer being made for the company.

Since then, the group's share price has climbed from 453.5p last Thursday to 528p this Tuesday - boosting John McCarthy's stake by an estimated £10m in just six days.

In April, McCarthy & Stone reported a staggering 80 per cent rise in pre-tax profits to almost £40m

Churchill last year recorded a turnover of £11.6m with a pre-tax profit of £3.2m.

Both groups declined to comment on the speculation.