Avant Homes has offer rejected after Bellway approach also turned down

A housebuilder run by former Persimmon boss Jeff Fairburn and controlled by a New York hedge fund has made a bid to buy Crest Nicholson, according to media reports.

Last month, Crest said it had rejected two takeover offers from larger rival Bellway in the spring.

Now Avant Homes, which according to 黑洞社区鈥檚 list of Top 50 Housebuilders had a turnover of 拢667m last year, is understood to have made an offer for the firm in June, according to Sky News, which was rejected.

Jeff Fairburn

Avant Homes is led by former Persimmon boss Jeff Fairburn

The proposed deal would see Avant, led by Fairburn, merged into Crest Nicholson, which would retain its Stock Exchange listing with New York hedge fund Elliott as its largest shareholder.

Under Bellway鈥檚 second rejected 拢650m deal, Crest鈥檚 shareholders would have received 0.093 shares in Bellway for each share they hold, with an implied value of 253 pence per share with a premium of around 18.8%. Crest Nicholson would have held 17% of the enlarged group鈥檚 share capital.

Under Stock Market regulations, Bellway has until next Thursday (11 July) to return with a new offer or withdraw from the takeover bid.

If it does come back with a bid, it could trigger a bidding war for 拢900m turnover Crest.

In an update to the Stock Exchange later this afternoon, Crest said: 鈥淭he Board of Crest Nicholson notes the recent press speculation and confirms that it has received unsolicited, preliminary, indicative proposals from Avant Homes regarding a possible all-share combination of Crest Nicholson and Avant.

鈥淭he Avant proposal implied Avant shareholders, including its main shareholder, Elliott Investment Management, would own approximately 30 per cent of the enlarged group.

鈥淭he Board of Crest Nicholson evaluated the Avant proposal with its financial advisers, Barclays and Jefferies, and concluded it was not currently minded to engage in discussions regarding a potential transaction with Avant while in an offer period in relation to a possible all-share offer from Bellway plc. Accordingly, the Board of Crest Nicholson sent a letter to Avant on 27 June 2024 setting out its decision and explaining its position.鈥

In a note sent out before Crest鈥檚 update, broker Investec said: 鈥淭here appears to be more competition to acquire Crest. As we previously wrote, we would not be surprised to see a revised offer be forthcoming from Bellway. We see the logic for Avant Homes鈥 interest given that it would facilitate a public listing [but] there is room for Bellway to come back with a higher offer.鈥

Fairburn is well known in the housing industry having been chief executive of Persimmon for five years before leaving in 2018 over controversial plans to award him a 拢110m bonus.

Last month, Crest Nicholson announced it made a 拢31m pre-tax loss in the six months to April, compared to a 拢28m profit the previous year. Revenue was also down 9% year-on-year to 拢257.5m. The figures have been impacted by Crest Nicholson discovering it needs to spend 拢31.4m to fix build defects.