Bellway confirms £650m offer for Crest Nicholson

Newcastle-based housebuilder Bellway plc has confirmed it proposed an all-share bid last month to acquire Crest Nicholson and the offer was rejected by its smaller rival.

The potential deal would have valued Crest Nicolson at about £650 million.

Crest Nicholson shares were down about 12% to give the firm a current stock market value of about £550 million.

The Newcastle firm said in a stock exchange statement: “The board of Bellway confirms that, on 7 May 2024, it made its latest non-binding all-share offer to the board of Crest Nicholson to acquire the entire issued, and to be issued, share capital of Crest Nicholson, which has been rejected by the board of Crest Nicholson.

“Under the terms of the possible offer, Crest Nicholson shareholders would receive 0.093 shares in Bellway for each share they own in Crest Nicholson.

“Based on the Bellway share price of 2,718 pence at close of business on 13 June 2024 (being the latest practicable date prior to this announcement), the terms of the possible offer represent an implied value of 253 pence per Crest Nicholson share.”

Bellway said Crest Nicholson shareholders would hold 17.1% of the enlarged group’s issued and to be issued share capital.

Bellway said its possible offer was pitched at a 30% premium to Crest Nicholson’s share price at the time the latest possible offer was made.

The Newcastle firm added: “The board of Bellway believes that 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.

“In addition, the board of Bellway believes a combination would deliver significant operational synergies and support sustainable shareholder returns through the cycle.

“There can be no certainty that an offer will ultimately be made.

“Rule 2.6(a) of the Code requires that Bellway, by no later than 5.00 p.m. on 11 July 2024, being the 28th day following the date of this announcement, to either announce a firm intention to make an offer for Crest Nicholson in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

“This deadline may be extended with the consent of the Takeover Panel, in accordance with Rule 2.6(c) of the Code.”