Bellway abandons potential £720m takeover deal for rival Crest Nicholson

Crest Nicholson previously said it was “minded” to accept the deal, but Bellway has now said it will not put forward a firm offer after talks between the companies.

Newcastle-based Bellway’s proposal would have seen it buy the share capital of Crest for 273p per share.

Crest shareholders would have held 18% of the combined company as part of the deal.

On Tuesday, Bellway said “that it does not intend to make a firm offer for Crest Nicholson” but did not explain its reason for dropping its takeover pursuit.

In a statement, Bellway added: “As noted in its trading update released on August 9, 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.”

In response, Crest said it “remains 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”.

Crest has also received interest over a potential merger deal from rival housing developer Avant Homes, which is owned by New York hedge fund Elliott.

Avant, which is led by former Persimmon boss Jeff Fairburn, saw its bid to buy Crest rejected last month.

The bid interest is the latest in a line of major mergers in the housebuilding industry, with companies joining forces after a period of high mortgage rates and weaker demand as economic uncertainty affected consumer confidence.

Earlier this year, two of Britain’s biggest housebuilders, Barratt Developments and Redrow, agreed to a tie-up worth £2.5 billion which they said would accelerate housebuilding across the country.