Housebuilder Crest Nicholson was this week forced to take its row with Heron International over a hostile takeover bid into the public arena
Crest admitted in a statement to the stock exchange on Wednesday that it had received an approach for a possible takeover from Heron – its biggest shareholder with a 23.4% stake.
Regeneration specialist Heron said that if it were to make a formal offer it would probably be pitched between 345p and 430p, valuing the company at a maximum of about £482m.
On Wednesday news of the possible bid sent Crest’s shares up 10% to 436p, an increase of 39.25p.
This put the market capitalisation of the firm at £489m.
Crest Nicholson has not permitted Heron to value it on an informed basis
Heron International statement
The company was forced into a corner after Heron made a statement complaining to the market and shareholders that, although it was keen to make a formal bid, Crest’s management had refused to brief it properly. The statement was a clear attempt to put pressure on Crest to open its books.
Tension has been bubbling for months since Heron, which is run by property entrepreneur Gerald Ronson, first started buying shares in Crest in August. Since that time, it has been no secret that Crest’s board, led by chief executive John Callcutt, has been hostile to Ronson’s approach. The board is thought to be angered by Ronson’s refusal to discuss his intentions.
The tension between the two was clear from the tone of the statements they issued. Heron’s said: “The board of Crest Nicholson has not provided any of the information that would permit Heron to value Crest Nicholson on an informed basis.”
This expression of interest was very unclear on a number of critical issues
Crest Nicholson statement
Hitting back, Crest’s statement said that the level of the bid indicated by Heron “would significantly undervalue the company”. It further criticised Heron for being too vague about its intentions: “This expression of interest was very unclear on a number of critical issues including the price of any possible offer, the parties that would make any offer, sources of funding and timetable.”
As Building went to press the situation had reached a stand-off, with Heron demanding Crest disclose more information and Crest adamant that the company was performing well, urging shareholders to “take no action”.
Crest Nicholson is a respected housebuilder, and part of the attraction for Ronson would be the fact that as a regeneration specialist, it is well placed to take advantage of the government’s ambitious plans to increase the number of affordable homes in the UK.