Crest Nicholson Rejects Bellway's Revised All-Share Offer, Citing Undervaluation

2 min read | June 14, 2024 03:18 AM EDT | By Team Kalkine Media

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Crest Nicholson Rejects Bellway's Revised All-Share Offer, Citing Undervaluation — Image source: Tanoy1412 | Shutterstock

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Crest Nicholson Holdings plc (CRST) has announced its rejection of a revised unsolicited preliminary proposal from Bellway plc regarding a possible all-share offer. The proposal, received on May 7, 2024, suggested an exchange of 0.093 new ordinary shares in Bellway for each Crest Nicholson share. This would result in Crest Nicholson's shareholders owning approximately 17.1% of the combined entity.

Details of the Revised Proposal

Based on Bellway's share price of 2,718 pence as of June 13, 2024, the Revised Proposal valued Crest Nicholson shares at 253 pence each. This represented an 18.8% premium to Crest Nicholson's share price of 213 pence as of June 13, 2024, and a 10.5% premium based on the one-month volume-weighted average share price of 229 pence per Crest Nicholson share.

Board's Response and Rejection

After thorough evaluation with its financial advisers, the Board of Crest Nicholson concluded that the Revised Proposal significantly undervalued the company and its future standalone prospects. Consequently, the Board unanimously rejected the offer on May 14, 2024, deeming it not in the best interests of Crest Nicholson's shareholders.

Previous Unsolicited Approach

This Revised Proposal followed an earlier unsolicited approach from Bellway on April 25, 2024. The initial offer proposed an exchange of 0.089 new ordinary shares in Bellway for each Crest Nicholson share. The Board of Crest Nicholson also unanimously rejected this Initial Proposal on May 2, 2024, for fundamentally undervaluing the company and its future prospects.

Implications for Crest Nicholson

The Board's decision to reject both proposals underscores its confidence in Crest Nicholson's independent growth trajectory and potential. By refusing the offers, the Board aims to ensure that shareholders receive full value for their investments based on the company's robust future prospects.

Strategic Considerations

The rejection highlights Crest Nicholson's strategic focus on maximizing shareholder value through its own initiatives rather than merging with Bellway under terms that do not reflect the company's true worth. The Board believes that Crest Nicholson's standalone prospects offer a more compelling value proposition for its shareholders than the proposed merger terms.

Moving Forward

As Crest Nicholson moves forward, the Board remains committed to its strategic vision and operational plans, confident in the company's ability to deliver substantial value to its shareholders independently. The Board's decision reinforces its belief in the strength and potential of Crest Nicholson's business model and growth strategies.

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