Crest Nicholson Says Bellway Revised Proposal ‘Significantly Undervalued’ Company

Crest Nicholson (LON: CRST) rejected a revised takeover proposal from Bellway (LON: BWY), claiming it significantly undervalued the company and its future prospects.

The revised all-share offer, announced by Bellway on June 13, would have seen Crest Nicholson shareholders receive 0.093 new shares in Bellway for each of their own shares. This translates to an implied value of 253 pence per Crest Nicholson share, representing an 18.8% premium to the current share price.

Crest Nicholson's board, however, concluded the offer fell short. “The Board…unanimously rejected the Revised Proposal on 14 May 2024,” citing undervaluation and a lack of benefit for shareholders.

This follows an earlier rejected offer in April, under which Bellway proposed 0.089 shares per Crest Nicholson share.

Crest Nicholson remains confident in its standalone future, pointing to a recently completed review of development sites, a strong land portfolio, and new leadership under Martyn Clark.

Bellway now has until July 11 to either formalize a firm offer or publicly announce its withdrawal from the takeover process.

In May, Deutsche Bank initiated Bellway with a Buy rating and a 3,013p price target. The bank's analysts highlighted Bellway's strong track record of organic growth and resilience in challenging markets as part of its bull thesis.

Meanwhile, UBS upgraded Crest Nicholson to Buy from Neutral, raising the price target for the stock to 225p from 215p per share in April. The investment bank said it sees an attractive entry point in the stock. Crest Nicholson shares declined more than 11% in Thursday's session and currently sit at around 212.8p.