(Bloomberg) -- Bellway Plc said it’s decided against pursuing a takeover of Crest Nicholson Holdings Plc just about a month after making a £700 million ($895 million) bid for the rival UK housebuilder.
The developer does not intend to make a firm offer for the company, according to a statement Tuesday. A deal would have marked one of the UK’s biggest-ever homebuilder acquisitions.
Shares of Crest tumbled as much as 17% in London, the biggest intraday loss since June 2020. Bellway jumped as much as 6.7%.
The past year has been turbulent for the nation’s developers as higher interest rates deterred buyers, increased their cost of capital and depressed their share prices. With sentiment slowly improving on expectation of lower interest rates and policy shake-ups, the sector is seeing an uptick in consolidation attempts.
Barratt Developments Plc agreed to buy rival Redrow Plc earlier this year in a proposal that would create the UK’s biggest homebuilder. The combination, which still needs regulatory approval, would give Barratt access to Redrow’s vast land bank just as Labour intends to increase housing output.
However, Bellway’s pursuit of Crest, which saw a proposal valuing the company at more than £700 million, has fallen apart even after Crest’s board signaled it would recommend the deal “unanimously” to shareholders last month. The deal had the potential to boost Bellway’s land bank, operating leverage and increase its exposure to the UK’s south, according to Bloomberg Intelligence industry analyst Iwona Hovenko.
(Updates with shares and details.)
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