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Crest Nicholson and Bellway, both FTSE 250-listed as Infrastructure sector firm, announced on Tuesday that Bellway has decided not to pursue a firm offer for Crest Nicholson. The potential merger, which had been under consideration since April, has now been officially shelved.
Details of the Takeover Approach
Bellway (LSE: BWY), based in Newcastle, initially made an all-share takeover proposal in late April, offering 0.089 Bellway shares for each Crest Nicholson share. This proposal was rejected by Crest Nicholson in May. A revised offer of 0.093 Bellway shares per Crest Nicholson share was also turned down.
In July, Bellway made another attempt, offering Crest Nicholson (LSE: CRST) shareholders 0.099 shares in Bellway for each share they own, along with a 4 pence per share dividend. This proposal valued each Crest Nicholson share at 273p. Despite these offers, Crest Nicholson's board remained unconvinced of the benefits to its shareholders.
Following the news of Bellway's decision not to proceed with a firm offer, Crest Nicholson's shares fell sharply, dropping 16% to 221.00p on Tuesday afternoon in London. In contrast, Bellway's shares rose by 3.3%, reaching 2,910.00p each.
Market Reaction and Company Statements
Earlier in July, Crest Nicholson had indicated a willingness to accept the revised proposal, which would have resulted in its shareholders owning 18% of the combined company's share capital. However, Bellway confirmed on Tuesday that it would not make a definitive offer.
Bellway stated that it remains confident in its future growth prospects, citing its strong balance sheet, operational capabilities, and the quality of its land bank as key factors that will drive volume growth and value creation for its shareholders in the coming years.
Crest Nicholson responded by acknowledging Bellway's decision and emphasized that the takeover proposals were unsolicited. The company expressed confidence in its own standalone future, particularly highlighting the conclusion of a review of provisions for completed development sites, supported by external consultants. Crest Nicholson also pointed to its attractive land portfolio and the recent appointment of Martyn Clark as its new chief executive officer as factors that strengthen its prospects.
Martyn Clark, who joined Crest Nicholson in June, previously spent nine years at Persimmon PLC, where he held the position of chief commercial officer in 2022.
