Housebuilder Crest Nicholson has rejected a second all-share takeover approach from Bellway valuing the group at around £650m.
Under the terms of the proposal, which was submitted on 7 May, for each Crest Nicholson share owned, Crest Nicholson’s shareholders would receive 0.093 new ordinary shares in Bellway.
Based on the Bellway share price of 2,718p as at close of business on 13 June 2024, the proposal represented an implied value of 253p per Crest Nicholson share – a premium of approximately 18.8% to the Crest Nicholson share price of 213p as at close of business on 13 June and a premium of approximately 10.5% based on the one-month volume weighted average share price of 229p.
The board of Crest Nicholson said it “evaluated the proposal with its financial advisers and concluded that it significantly undervalued Crest Nicholson and its future standalone prospects and was not in the best interests of Crest Nicholson’s shareholders”.
The board unanimously rejected the proposal on 14 May 2024 and said it had also rejected an earlier unsolicited approach from Bellway in April regarding a possible all-share offer.
In a statement, Crest Nicholson said the company was “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”.
The board of Bellway said it believed that there was a “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 said a combination would “deliver significant operational synergies and support sustainable shareholder returns through the cycle”.
