British homebuilder Bellway on Thursday made public an all-share bid it proposed last month to acquire Crest Nicholson, after the offer was rejected by its smaller rival.
The potential deal would have valued Crest at about 650 million pounds ($829.53 million), according to Reuters’ calculations.
The move underscores the consolidation efforts in the UK’s homebuilding industry, which is pressured by weak demand but is hopeful of a recovery.
Earlier this year, Britain’s biggest homebuilder Barratt agreed to buy Redrow in an all-stock deal, while Vistry bought Countryside in 2022.
Bellway said there was “compelling strategic and financial rationale” for a combination with Crest, highlighting long-term opportunities to grow in the market, a reduced risk profile and “sustainable” shareholder returns.
Crest declined to comment.
While it was not clear why Crest rejected the offer, Bellway said it would have been worth about 253 pence per Crest share, based on Thursday’s closing price for Bellway shares.
Earlier in the day, Crest warned its annual profit would drop by at least a third and reported an 88% slump in half-year earnings on slowing demand.
Bellway, however, raised its annual average selling price forecast last week and pointed to strong trading in the spring selling season, as improved affordability from expected reductions in borrowing costs lifted customer confidence.
A shortage of properties has been driving up the cost of owning a home in Britain and alienating many younger voters who, paying high rents, cannot see a way to own their own homes in the country where housing has long been a political issue.
The competition regulator had said builders and the government need to fix the shortage. Manifestoes of both the Labour and Conservatives are also keenly being watched for housing pledges ahead of the July elections.
Source: Reuters.com