Bidders 'blocked from entering negotiations for house-builder'

Businessman Hugh Osmond is said to have made an offer of about 350m for the firm last month.

Other companies thought to be interested in buying Crest Nicholson include York-based housebuilder Persimmon, Galliford Try and Redrow. Hedge fund Toscafund is another possible buyer.

Mr Osmond has been given exclusivity in negotiations until mid June.

But rivals are angry that they are not being allowed to table their own bids.

Crest Nicholson is currently 90 per cent owned by a consortium of banks, including state-

backed Lloyds Banking

Group.

The housebuilder has appointed Morgan Stanley as a financial advisor and said the US bank will assist the group "in reviewing its options for

the future with its stakeholders."

The indebted housebuilder was seized by its lenders, led by state-backed Lloyds Banking Group, in a debt-for-equity swap last year.

Lloyds, 41 per cent owned by British taxpayers, is the largest stakeholder in the consortium of over 30 banks with a 25 per cent stake.

The consortium wrote off 630m of debt in return for a 90 per cent stake in Crest Nicholson with the remaining 10 per cent held by the company's management.

Crest Nicholson was taken over by Halifax Bank of Scotland and Scottish entrepreneur Sir Tom Hunter in a 50-50 venture in May 2007 for 715m, backed by 1.12bn of debt.