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Bellway PLC on Thursday confirmed it made a takeover proposal for Crest Nicholson PLC, though its fellow housebuilder rejected the tilt.
Bellway said under the terms of the bid, Crest Nicholson investors would have stood to receive 0.093 of a Bellway share for each Crest Nicholson share. It valued Crest Nicholson shares at 253.00 pence each, the company’s equity overall at around £650.0 million. Crest Nicholson shareholders would own 17% of the enlarged firm.
Bellway said that the Surrey, England-based housebuilder rejected its proposal, though it still believes in the growth opportunity a tie-up would provide.
‘The board of Bellway believes that there is compelling strategic and financial rationale for a combination of Bellway and Crest Nicholson which 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, a reduced risk profile, lower indebtedness and an enhanced landbank to capitalise on the long-term structural growth opportunity in the UK housing market. In addition, the board of Bellway believes a combination would deliver significant operational synergies and support sustainable shareholder returns through the cycle,’ it added.
‘There can be no certainty that an offer will ultimately be made.’
Crest Nicholson shares slumped 12%, closing at 212.80 pence in London on Thursday, giving it a market capitalisation of £546.7 million. Bellway fell 2.9% to 2,718.00p, valuing it at £3.22 billion.
On Thursday, Crest Nicholson reported a £30.9 million pretax loss for the six months to April 30, swung from a £28.4 million profit a year before. Its basic loss per share was 9.1 pence, compared with 8.2p.
Revenue decreased 8.9% to £257.5 million from £282.7 million, as home completions decreased 12% to 788 from 894.
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