Bellway has called off its £720m bid for Crest Nicholson, putting an end to the prospect of a merger between the two companies.
The housebuilder said its decision not to proceed with a firm offer comes after its trading update last week, where the company expressed confidence in its financial health, operational capabilities and substantial land bank.
The firm said that these assets will continue to support its growth trajectory without the need to proceed with the acquisition.
In July, Crest Nicholson’s board said it was “minded to recommend” a £720m bid from Bellway after previously rejecting a £650m offer.
Bellway originally had until 8 August to make a legally binding offer for Crest Nicholson or else desist in its takeover attempts.
Last week, however, the firm announced it had been granted a 12-day extension by the Panel on Takeovers and Mergers.
A Bellway statement released after that extension said that “good progress has been made on reciprocal due diligence with a number of elements satisfactorily completed by both parties”.
In July, the boards of Bellway and Crest Nicholson said that there was “a compelling strategic and financial rationale” for a combination of the two firms.
A joint statement said: “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.
“In addition, the board of Bellway believes a combination would deliver significant operational benefits (including procurement synergies) and the ability to open dual outlets on at least 10 current and future Crest Nicholson sites with complementary brands to drive incremental volumes at attractive margins.”
The merger between Crest and Bellway, which have turnovers of £780m and £1.25bn respectively, would have created further consolidation in the housebuilding sector – with two other giants, Redrow and Barratt, also looking to combine.
