Bellway has announced that it no longer intends to take over Crest Nicholson after being given deadline to make a hard offer
Bellway has made a decision to not make an offer on Crest Nicholson, after they were asked to make a hard offer by a certain deadline.
The move would have made a company with a turnover of £4.3bn.
The latest blow to Crest Nicholson
Crest Nicholson have been struggling, with shares down by 20% upon Bellway’s announcement, and they have spent the last financial year paying safety, maintenance, and quality costs on its completed developments.
In June, Crest Nicholson announced they paying a £31.4m remediation cost after external investigations.
The fall in new house builds and demand over the past few years means that Crest Nicholson have been struggling.
Bellway announced the intent to consolidate with Crest Nicholson amid a wave of of similar announcements as construction companies find consolidation the only way out from slumps potentially too difficult to climb from. Amid these announcements are Barratt working to take over Redrow, and L&G putting Cala Homes up for sale.
Bellway did not give a reason for walking away from the offer
However, given that they are the bigger company, it is likely to do with offered value.
The negotiations have seen Crest Nicholson reject two offers from Bellway, as they said it undervalued the company. Eventually, Bellway offered 273p per share.
However, after being given more time to think about it, it seems Bellway have changed their mind.
Bellway themselves are a company with a £3.4bn turnover, and so are doing well as a UK construction company.
In their statement, Bellway said: “Bellway remains confident that its robust balance sheet and operational strength, combined with the depth and quality of its land bank, will enable Bellway to deliver volume growth in the years ahead and support ongoing value creation for shareholders.”
