Last month the board of Crest Nicholson accepted Bellway’s £720m takeover offer pending due diligence investigations of both sides. The board had previously rejected two offers from Bellway, most recently in May when Bellway’s offer of £650m was knocked back despite valuing Crest Nicholson at a 30% premium on its current share price.
While Bellway went away to reconsider its offer, Crest Nicholson rejected an approach by rival house-builder Avant Homes. Avant had offered a £770m deal that would have given Avant shareholders 30% of the enlarged group and retained Crest Nicholson’s stock exchange listing.
On 3rd July, following further discussions, Bellway submitted an offer valuing the business at £720m and giving Crest Nicholson shareholders 18% of the combined group. Bellway said that, following the merger, it would retain and use the Crest Nicholson brand across the combined group.
On 10th July, Crest Nicholson said it was minded to recommend shareholders approve a revised £720m takeover bid should the offer be formalised. Under stock exchange takeover rules, Bellway then had until 8th August to either make a firm offer or walk away.
Last week, after Bellway said it needed more time to conclude its due diligence, the City takeover panel extended the deadline to 20th August.
But just after midday on Tuesday 13th August Bellway issued a statement confirming that “it does not intend to make a firm offer for Crest Nicholson”.
The statement went on: “Bellway remains confident that its robust balance sheet and operational strength, combined with the depth and quality of its land bank, will enable Bellway to deliver volume growth in the years ahead and support ongoing value creation for shareholders.”
The Financial Times reported that, following the announcement, shares in Crest Nicholson fell more than 18% in early afternoon trading while Bellway stock rose by 4%.
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