(Alliance News) - Crest Nicholson Holdings PLC on Wednesday said it is minded to accept a revised bid proposal from fellow housebuilder Bellway PLC.

Last Wednesday, Surrey-based Crest Nicholson said Bellway submitted a new bid approach, after two previous plans had been rejected.

Under the revised terms, Crest Nicholson's shareholders would receive 0.099 shares in Bellway for each share they own plus a 4 pence per share dividend. This would comprise a 1p per share dividend and 3p per share special dividend.

Under the terms of the proposal, Crest Nicholson's shareholders would hold 18% of the enlarged group's share capital.

The firms said that based on the Bellway share price of 2,718 pence at close of business on June 13, the day before the talks were revealed, the proposal values each Crest share at 273p. However, shares in Bellway have fallen since.

Shares in Crest Nicholson rose 3.0% to 245.65p in London on Wednesday, giving it a market capitalisation of GBP631.0 million. Shares in Bellway fell 1.6% to 2,540.00p each, giving it a market cap of GBP3.03 billion.

"The boards of Bellway and Crest Nicholson believe that there is compelling strategic and financial rationale for a combination of Bellway and Crest Nicholson. The revised proposal 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," the two companies said in a statement.

Crest received an initial all-share offer on April 25 that would have seen Crest investors receive 0.089 new ordinary shares in Bellway. This proposal was rejected on May 2.

A revised offer put forward on May 7 increased the offer to 0.093 shares in Bellway for each Crest share, which would have left Crest shareholders with approximately 17% of the combined entity. This was rejected on May 14.

Last Friday, Crest Nicholson said it had rejected an approach from Avant Homes, regarding a possible all-share combination.

Avant – an affordable housebuilder focused on the Midlands, the North of England, and Scotland – is backed by US investment firm Elliott Advisors.

But Crest Nicholson said it was not currently minded to engage in discussions and had explained the decision in a letter to Avant.

Bellway has until August 8 to announce an intention to make a firm proposal to buy Crest Nicholson.

By Jeremy Cutler, Alliance News reporter

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