Exciting twist in the takeover battle: Crest Nicholson intends to accept £720 million offer from Bellway

The British real estate developer Crest Nicholson has announced that it will recommend a revised takeover offer from competitor Bellway worth 720 million pounds. Previously, the company had rejected two earlier offers from Bellway, citing insufficient valuations, and also dismissed a competing bid from Avant Homes. Bellway increased its bid to 273 pence per share, representing a 28 percent premium over Crest Nicholson's closing price on June 13. The original offer had only provided a 19 percent premium, valuing the shares at 667 million pounds. In a statement, the board of Crest Nicholson indicated that the revised offer had a value that they could "unanimously recommend" to the shareholders. Accepting the bid, however, would mean rejecting Avant Homes' competing offer. In July, Crest Nicholson had already stated that it was "currently not inclined to engage in discussions regarding a possible transaction with Avant," while being in negotiations with Bellway. Bellway now has until early August to submit a concrete offer. However, an insider emphasized that there was no certainty that the deal would actually go through. This takeover battle for Crest Nicholson is taking place amid a period of consolidation in the real estate industry, marked by declining home sales and high mortgage rates. Earlier this year, Barratt successfully completed a 2.5 billion-pound takeover of Redrow to strengthen its position as the largest UK homebuilder, while Legal & General is in the process of selling Cala Homes. Crest Nicholson's shares rose by about 4 percent in Wednesday trading, while Bellway's fell by 0.5 percent. The FTSE 250 Index recorded a gain of around 0.7 percent. Both companies had benefited from a rally last week, triggered by the expectation that a Labour Party election victory would lead to a housing boom. Crest Nicholson was seen as a takeover target after a series of profit warnings and unexpected costs due to problems at older construction sites had burdened the balance sheet. Former CEO Peter Truscott had attempted a turnaround but stepped down in mid-June and was replaced by Martyn Clark. Anthony Codling, an analyst at RBC, spoke positively about the deal for Bellway, as it could acquire Crest Nicholson’s land reserves below "book value." "The big question, however, is whether Crest has fully addressed the [legacy issues] or whether problems will arise again," he remarked. Avant Homes has so far declined to comment on whether it will continue to pursue an offer.