Housebuilder Bellway has revealed that it has made a £650m approach to take over one of its main rivals, though the bid has so far been unsuccessful.
Newcastle-based Bellway, currently the third largest housebuilder in the 海角视频, issued a statement to the Stock Exchange confirming that it had made an offer to buy Crest Nicholson, which stands just outside the country’s top 10 builders. Bellway said the all-share offer, which would give Crest Nicholson shareholders 17.1% of the enlarged group, had a “compelling strategic and financial rationale” and that it would deliver “significant operational synergies and support sustainable shareholder returns through the cycle”.
Surrey-based Crest Nicholson, which earlier this week reported a 71% drop in half-year profits, has rejected the offer, saying that it “significantly undervalued Crest Nicholson and its future standalone prospects and was not in the best interests of Crest Nicholson’s shareholders". Crest Nicholson also revealed that it had rejected two bids, one in April followed by an improved offer in May.
Read more: student accommodation block sells for more than £28m
Go here for more North East business news
Under Stock Market regulations, Bellway now has until July 11 to return with a new offer or withdraw from the takeover bid.
The approach comes at a tough time for all housebuilders which has seen significant consolidation in the sector.
Barratt, the country’s largest housebuilder, earlier this year announced a deal to take over Top 10 firm Redrow while a deal in 2022 saw Vistry take over Countryside. Earlier this week, investment giant Legal and General said it was looking to offload its Cala housebuilding subsidiary, with Persimmon previously linked to a potential takeover of that firm.
Most Read
Rising interest rates and the cost-of-living crisis have led to tougher conditions across the 海角视频 housebuilding sector in the last 18 months, albeit after a boom period for companies like Bellway in the years of low interest and Government help for first-time buyers. In those more optimistic times, the company had set out a goal of growing significantly to build around 18,000 homes a year. Last year it built just under 11,000 and has said the figure is likely to fall to around 7,500 this year.
But the company has reported signs of recovery in the housing market, with a trading update last week saying there had been “stronger trading through the spring selling season” and data showing that its sites had seen an increase in activity when compared to the previous year.
Bellway began as a small family business in 1946 and has grown to become the North East’s fifth largest company by turnover. It moved to new headquarters near Newcastle Airport in 2020.