Newcastle-based housebuilder Bellway plc has dropped its unsolicited £720 million all-share bid for rival Crest Nicholson, the companies said. 

The move ends a months-long standoff, in which a third party, Avant Homes, also made a bid for Crest Nicholson. 

“Further to the previous announcements made by Bellway and Crest Nicholson regarding a possible offer for Crest Nicholson, Bellway confirms that it does not intend to make a firm offer for Crest Nicholson,” Bellway said in a regulatory filing. 

The UK Takeover Panel had earlier extended the deadline for the takeover proposal by Bellway to August 20, but the homebuilder decided against proceeding. 

“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.”

In a separate filing, Crest Nicholson said its board had “engaged with Bellway in relation to a possible all-share offer for Crest Nicholson in response to a series of unsolicited proposals from Bellway.”

“Crest Nicholson remains confident in its standalone prospects, in particular given conclusion of the review of provisions for completed development sites supported by external consultants, its highly attractive land portfolio and the new leadership of Martyn Clark,” it added. 

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘’The bidding war for Crest Nicholson is crumbling after Bellway walked away from its high-vis bid for the firm. Investors’ disappointment is reflected in the share price slide, with the stock falling by more than 17%. Shares are not back at the level they were before the first bid from Bellway, indicating that there is a glimmer of hope Avant Homes may come through with another offer.”

“It’s not clear exactly why Bellway has walked away after a deal between the two looked close, but the talks between the two clearly raised some concerns that a long-term tie-up may not justify the £720 million price tag. Both firms remain bullish about their stand-alone prospects, helped by the recent interest rate cut, with more reductions expected on the horizon.

“With the government determined to power ahead with its plan to build 1.5 million new homes, and steam roller planning obstacles, there is confidence about opportunity and demand going forward. But a fresh bid for Crest Nicholson can’t yet be ruled out, at a time of consolidation in the industry.’’