Crest Nicholson set to accept £720m Bellway bid as housebuilders eye tie-up

Crest Nicholson is set unanimously to recommend a revised all-share offer from rival FTSE 250 housebuilder Bellway that values the firm at £720m.

The second offer is a £70m improvement on Bellway’s initial offer, made in June, which valued Crest at £650m.

Under the revised terms, Crest shareholders would be in line to receive just under 0.01 shares in Bellway for each Crest share they own, on top of a dividend of 4 pence per Crest share.

The dividend would comprise the previously announced interim dividend of one pence per share, as well as a special dividend of 3 pence per share, assuming a formal offer is made and the transaction then completes.

The announcement helps explain why just days ago, the Crest board rejected a similar approach from the Elliott-backed Avant, saying it was “not currently minded to engage” with negotiations with other firms.

Bellway’s latest bid, which has an implied value of 273p per Crest Nicholson share, represents a 28.3 per cent premium to the closing price per share on 13 June, the date when it tabled its first bid.

Now, Bellway is required to set out its firm intention to make an offer by 5pm on August 8.

The transaction, should it go through, more evidence of consolidation in the housebuilding sector. In February, Barratt and Redrow – two of the largest homebuilders in the UK – inked a £2.5bn megamerger.

And in 2022, Vistry put pen to paper on a successful billion-pound takeover of Countryside.

Under the deal between Crest and Bellway, the former’s shareholders would hold 18 per cent of the new group’s issued, and to be issued, share capital.

In a joint statement the firms said: “The boards of Bellway and Crest Nicholson believe that there is compelling strategic and financial rationale for a combination of [the two firms].

“The revised proposal 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”

It also confirmed that the Bellway board intends to retain the Crest Nicholson brand across the merged group, including new Bellway sites.