One of UK’s biggest housebuilders receives £720million takeover bid by rival
ONE of the UK’s biggest housebuilders, Crest Nicholson, yesterday said it was receptive to a £720million takeover bid by rival Bellway.
Bellway is hoping for a deal after two previous approaches were rejected, but investors seem unconvinced.
A combined company would be worth £4billion and add to the wave of dealmaking that has already seen Redrow and Barratt strike a £2.6billion merger.
Crest Nicholson said Bellway upped its offer to 273p a share, from the 253p attempt in June.
However its shares yesterday were well below the offer price at 239.60p, valuing the firm at £615.5million.
It suggests shareholders are not convinced of a deal and may reject it.
An insider stressed there was no certainty and the parties had until August 8 to do due diligence.
It comes just a week after Crest Nicholson rejected a reverse takeover approach from Avant Homes, fearing it would load the company with debt.
Crest Nicholson is known for building premium family houses in the South East while Bellway makes more affordable homes across the UK.
Oli Creasey, property analyst at Quilter Cheviot, said: “The Crest Nicholson brand is complementary to Bellway’s existing business as it tends to build higher value homes.”
Bellway plans to build around 7,500 houses this year while Crest Nicholson lowered estimates to 1,800.
Barratt yesterday revealed it will build only slightly more this year than at the height of Covid.
Sun business comment
“GAZUMPING” is a horrible risk when it comes to buying a house.
It works when a seller agrees a deal, but then accepts a better offer from someone else.
This could be the case with Crest Nicholson, after shares hit a low of 185p in April.
Based on its land bank valuation alone, Crest Nicholson’s valuation is cheap. Meanwhile, the company has blamed higher mortgage rates for low demand.
New Government targets may inspire a rival to put in a higher bid before it goes off the market.
This year’s AI model
THE model in this picture is not real but the latest face of Mango — the first major fashion retailer to use generative artificial intelligence.
The firm has adopted AI technology trained by a human model’s poses to help promote a clothing line targeted at teens.
It means young shoppers not only have filtered and edited social media influencers to contend with, but robots to boot.
Mango’s chief information technology officer, Jordi Alex, said that AI was a technological revolution that should “act as a co-pilot to extend the capabilities of our employees and further amplify our creativity”.
The firm, which launched in Spain in 1984, has developed more than 15 machine learning platforms since 2018.
These apply AI to improve, it says, the capabilities of its staff.
Concerns about the threat of generative AI have prompted regulators worldwide to scrutinise major players.
Microsoft said yesterday it would no longer have a board seat on ChatGPT owner OpenAI, in part due to regulatory scrutiny.
Direct to websites
DIRECT LINE is making its insurance products available on price comparison websites for the first time in its history.
New boss Adam Winslow has suggested the firm has been missing out as 90 per cent of Brits use the sites when choosing an insurer.
He said: “This marks a new chapter in our mission to make insurance simple and accessible for everyone.”
Shares rose 3.27 per cent on the news yesterday, to 199p.
Listings rules in shake-up
THE City watchdog has revealed its long-awaited shake-up of the London Stock Exchange’s rules to try to attract more listings.
It comes as the number of listed companies in the UK has fallen by 40 per cent since 2008.
The Financial Conduct Authority is trying to make its rules “more straightforward” to make it simpler for companies to float and raise capital.
Changes include scrapping shareholder votes on deals between “related parties” and other UK-listed firms.
This means bosses could do deals with family-owned companies without investor approval.
It will also allow companies to list on London’s main market with less than three years of financial accounts.
The FCA admitted it meant “allowing greater risk”.
Chancellor Rachel Reeves said it was a “significant first step towards reinvigorating our capital markets”.
Water firm jam
SOUTH EAST WATER is the latest troubled water company to say it needs a cash injection from investors to survive.
The firm, which serves 2.3 million customers across Kent, Sussex, Surrey, Hampshire and Berkshire, said it was “in discussions with lenders and shareholders” to ensure it had “sufficient liquidity”.
It comes just a day after Thames Water said it only had 11 months of cash left.
Last year, South East Water paid out £9million in dividends despite a £74million loss and £1.2billion of debt.
Huge gains
BUDGET fitness chain The Gym Group has seen a big rise in profits after luring customers away from more expensive rivals.
It has added 38,000 more members in the past year across its 237 gyms, and increased revenues by 12 per cent to £112.1million
Rate hope dims
MARKETS are downplaying the chance of an interest rate cut next month after a cautious speech by the Bank of England’s chief economist.
Huw Pill, a member of the Monetary Policy Committee that sets the rate, warned it is not enough for inflation to reach its two per cent target “in a transitory or fleeting way”.
He said it is “hard to dispute” inflation is persistent.
Traders reckon there is less than a 50 per cent probability of an August rate cut despite two of nine MPC members already voting for one.