Bellway makes moves for rival Crest Nicholson

Housebuilder Bellway has made two rejected offers for struggling rival Crest Nicholson. Bellway said in a stock market update responding to press reports that its latest offer was made on 7 May, and was for 0.093 Bellway shares for each Crest Nicholson share.  Based on Bellway’s share price yesterday, that would value Crest Nicholson’s equity at 253p per share, a 30% premium to its then-share price, or roughly £650m. The offer was rejected. An earlier proposal would have seen Crest Nicholson shareholders receive 0.089 Bellway shares for each share they held, according to a separate statement from Crest Nicholson. Crest Nicholson yesterday posted a half-year loss and issued a profit warning. It said the latest approach from Bellway “significantly undervalued Crest Nicholson and its future standalone prospects and was not in the best interests of Crest Nicholson’s shareholders”.  Bellway said its board “believes there is compelling strategic and financial rationale for a combination of Bellway and Crest Nicholson, which would bring together the strength of each business with complementary brands to reinforce Bellway’s position as a leading UK housebuilder, while enabling Crest Nicholson shareholders to benefit from the scale of the combined business, a reduced risk profile, lower indebtedness and an enhanced landbank to capitalise on the long-term structural growth opportunity in the UK housing market”. It now has until 11 July to make a firm offer or walk away. Image from Bellway