Investment firm Elliott Advisors has recently made a secret takeover offer for London-listed housebuilder Crest Nicholson, according to sources close to the matter. The offer, made last month by Elliott-owned Avant Homes, was an all-share proposal that would have resulted in Elliott becoming the largest shareholder in the combined group.
However, it has been reported that Crest’s board rejected the offer within the last 10 days. City sources have expressed concerns that the proposed merger may not be in the best interest of Crest Nicholson shareholders.
This latest development comes just weeks after Crest turned down a bid from fellow London-listed housebuilder Bellway. The rejected bid, valued at £665m, has now prompted Bellway to face a deadline set by the Takeover Panel to make a formal offer for Crest by next Thursday. It is currently unclear if Bellway intends to submit a revised bid.
In a statement released last month, Crest Nicholson’s board stated that they had evaluated the revised proposal with their financial advisors and concluded that it significantly undervalued the company and its future prospects as a standalone entity. They unanimously rejected the offer on May 14th, 2024.
The potential bidding war for one of Britain’s largest housebuilders has put the industry back in the spotlight, as it will likely be a key focus of the new Labour government’s policy agenda. In their manifesto, Labour pledged to build 1.5 million homes during their first five-year term.
Following Labour’s landslide victory on Friday morning, housebuilding stocks saw a positive response, with companies such as Persimmon, Barratt Developments, and Taylor Wimpey all seeing gains. Persimmon is already considering a bid for Cala Group, owned by Legal & General, while Barratt and Redrow agreed to a £2.5bn merger earlier this year.
As of Friday morning, Crest Nicholson’s shares were up 1.4% at 248p, giving the company a market capitalisation of £628m. Avant Homes is chaired by former Persimmon chief Jeff Fairburn, who left the company in 2018 amidst controversy surrounding his pay package. Elliott had previously acquired Avant through Berkeley DeVeer.
Avant is being advised by HSBC and Bank of America on their interest in Crest Nicholson, while Crest is being advised by Barclays and Jefferies. Neither Elliott nor Crest have commented on the matter.
