Crest Nicholson rejects £650m takeover bid from Bellway

Under the new terms, Crest’s shareholders would receive 0.093 new ordinary shares in Bellway for each share owned, meaning they would own approximately 17.1% of the combined entity.

The revised proposal represented a premium of around 18.8% to the Crest share price of 213p at close of business on 13 June, or around 10.5%, based on the one-month volume weighted average share price of 229 pence per share.

In a statement to the stock exchange, Bellway said it believes “there is compelling strategic and financial rationale” for the takeover “to reinforce Bellway’s position as a leading UK house builder.

It believes this would enable Crest’s shareholders to benefit from the scale of the combined business, a reduced risk profile, lower indebtedness and an enhanced landbank”.

At the end of April, Bellway made an initial offer that would have seen Crest’s shareholders receive 0.089 new ordinary shares in Bellway.

Crest said it remains “confident in its standalone prospects” due to its new leadership under Martyn Clark, its land portfolio and the conclusion of its review into remediation provisions.

The house builder reported yesterday that the bill to remediate building safety issues was more than double its last estimate, totalling £31.4m.

The figure is more than double the £15m it estimated would be needed in March, when it said it had appointed external consultants to assess how much money it should put aside for building safety issues after finding defects at four more sites.

Bellway is now required either to announce a firm intention to make an offer or to say it does not intend to do so by 11 July. It said there is “no certainty” an offer will be made.

This week, Bellway highlighted stronger trading throughout the spring selling season but noted an “expected reduction in social housing output in financial year 2025”.