One of Britain’s biggest housebuilders said it made for a £650m bid for a rival developer as the construction industry grapples with a severe downturn.
In an update to investors after markets closed on Thursday, Bellway said Crest Nicholson had rejected an offer tabled last month.
Newcastle-based Bellway said there remains “compelling strategic and financial rationale” for a potential agreement, claiming it would allow Crest Nicholson to lower its debt and “benefit from the scale of the combined business.
FTSE 250-listed Bellway is worth around £3.2bn, making it the fifth largest housebuilder on the London Stock Exchange. Crest Nicholson was worth £547m as markets closed after its share price slumped almost 12pc on Thursday.
The rejected offer emerged on the same day Crest Nicholson posted a £31m loss for the six months to May, fuelled by a broader slump across the housebuilding sector.
Bellway’s announcement on Thursday evening, which was made without Crest Nicholson’s consent, added that there is no certainty that a formal offer will be made.
However, it now has until July 11 to announce a further approach for the business.
It comes months after Barratt Developments struck a £2.5bn deal for competitor RedRow. Consolidation in Britain’s housebuilding sector has been prompted by high mortgage rates, causing a slowdown in new house sales.
Crest Nicholson’s share price fell by more than 8pc on Thursday, driven by the company’s latest set of financial results.
As part of its latest update, the developer slashed its profit forecast for the year to between £22m and £29m, far below the £38.9m previously expected by analysts.
It also trimmed its forecasts for the number of new homes it expects to deliver in the year to the end of October, down from 1,800 to 2,000 to 1,800 and 1,900.
Bosses blamed the results on high mortgage rates, economic uncertainty and planning delays.
The company’s latest results were the final set for outgoing chief executive Peter Truscott, whose departure was announced in January after Crest Nicholson reported a 70pc drop in its profits.
Martyn Clark, formerly of rival housebuilder Persimmon, joined the business on June 3 and takes over as chief executive on Friday.
He will be tasked with tackling continued delays in the planning sector, which Crest Nicholson said are holding back development.