On 13 June 2024, Bellway p.l.c. (“Bellway”) announced the terms of a possible all-share offer for Crest Nicholson Holdings plc (“Crest Nicholson”). The announcement stated that, in accordance with Rule 2.6(a) of the Code, Bellway was required, by no later than 5.00 p.m. (London time) on 11 July 2024, to either announce a firm intention to make an offer for Crest Nicholson in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies (the “PUSU Deadline”).

On 14 June 2024, Crest Nicholson confirmed it had received two unsolicited preliminary proposals from Bellway in relation to a possible all-share offer for Crest Nicholson, both of which had been unanimously rejected by the Board of Crest Nicholson.

Following further discussions between Bellway and Crest Nicholson, on 3 July 2024 Bellway submitted its latest non-binding all-share offer to the Board of Crest Nicholson to acquire the entire issued, and to be issued, share capital of Crest Nicholson. Under the terms of this latest possible offer, Crest Nicholson’s shareholders would receive:

0.099 shares in Bellway for each share they own in Crest Nicholson and a dividend of 4 pence per Crest Nicholson share comprising the previously announced interim dividend of 1 pence per share (the “Interim Dividend”) and a special dividend of 3 pence per share conditional on completion of the transaction (the “Special Dividend”) (together, the “Revised Proposal”).

Based on the undisturbed Bellway share price of 2,718 pence at close of business on 13 June 2024 (being the latest practicable date prior to the commencement of the offer period), the terms of the Revised Proposal represent an implied value of 273 pence per Crest Nicholson share and:

  • a premium of approximately 28.3 per cent. to the closing price per Crest Nicholson share on 13 June 2024 (being the latest practicable date prior to the commencement of the offer period);
  • a premium of approximately 30.2 per cent. to the 3-month VWAP per Crest Nicholson share on 13 June 2024 (being the latest practicable date prior to the commencement of the offer period); and
  • a premium of approximately 36.3 per cent. to the 12-month VWAP per Crest Nicholson share on 13 June 2024 (being the latest practicable date prior to the commencement of the offer period).

Under the terms of the Revised Proposal, Crest Nicholson’s shareholders would hold 18 per cent. of the enlarged group’s issued and to be issued share capital.

The Revised Proposal is subject to a number of pre-conditions, including completion of satisfactory due diligence.

The Board of Crest Nicholson has confirmed to Bellway that the Revised Proposal is at a value that it would be minded to recommend unanimously to Crest Nicholson’s shareholders, should a firm intention to make an offer pursuant to Rule 2.7 of the Code be announced on the financial terms set out above and subject to agreement on other key terms and definitive transaction documentation.

The Boards of Bellway and Crest Nicholson believe that there is compelling strategic and financial rationale for a combination of Bellway and Crest Nicholson. 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. As part of the combination the Board of Bellway intends to retain and deploy the Crest Nicholson brand across the enlarged group (including on Bellway sites).

In order to enable satisfactory due diligence to take place, Bellway has requested, and the Board of Crest Nicholson and the Panel on Takeovers and Mergers (the “Takeover Panel”) have consented to, an extension to the PUSU Deadline.

Consequently, in accordance with Rule 2.6(c) of the Code, Bellway is required, by no later than 5.00 p.m. on 8 August 2024 either to announce a firm intention to make an offer for Crest Nicholson under Rule 2.7 of the Code or to announce that it does not intend to make an offer for Crest Nicholson, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.  This deadline may only be extended with the agreement of Crest Nicholson and the Panel in accordance with Rule 2.6(c) of the Code.

There can be no certainty that a firm offer will ultimately be made for Crest Nicholson by Bellway, even if the pre-conditions are satisfied or waived. Bellway reserves the right to waive any pre-condition to the making of an offer. A further announcement will be made as and when appropriate.

In accordance with Rule 2.5(a) of the Code, Bellway reserves the right to introduce other forms of consideration and/or vary the mix or composition of consideration of any offer. In addition, Bellway reserves the right to make an offer for Crest Nicholson at a lower value or on less favourable terms than the Revised Proposal: (i) with the agreement or recommendation of the Board of Crest Nicholson; (ii) if a third party announces a firm intention to make an offer for Crest Nicholson, which, at that date, is of a value less than the value of the Revised Proposal, and is recommended by the Board of Crest Nicholson; or (iii) following the announcement by Crest Nicholson of a Rule 9 waiver transaction pursuant to Appendix 1 of the Code or a reverse takeover (as defined in the Code). If Crest Nicholson declares, makes or pays any dividend or distribution or other return of value or payment to its shareholders, other than the Interim Dividend and Special Dividend, Bellway reserves the right to make an equivalent reduction to the Revised Proposal.

This announcement has been made with the consent of Bellway and Crest Nicholson.

The person responsible for arranging the release of this announcement on behalf of Bellway is Simon Scougall, Group General Counsel and Company Secretary and on behalf of Crest Nicholson is Penny Thomas, Group Company Secretary.