Shares in Crest Nicholson jump after revealing it has rejected two takeover bids from rival Bellway

Shares in Crest Nicholson jumped yesterday after revealing it has rejected two takeover bids from rival Bellway.

The struggling Surrey housebuilder confirmed it had turned down the offers – the second of which was worth £650m – because it is ‘confident’ in its future as a standalone company.

Crest Nicholson’s shares rose 13.7 per cent on investor hopes that its larger competitor will return to the table with a sweeter deal.

It came as Martyn Clark yesterday took over as chief executive from Peter Truscott.

Clark joined a day after the developer issued its fifth profit warning in less than a year, sending shares tumbling more than 11 per cent. Annual profits are expected to be between £22m and £29m – down from previous forecasts of £39m.

Russ Mould, investment director at broker AJ Bell, said: ‘Crest Nicholson’s profit warning made for miserable reading so its investors might welcome a nice bid premium to dig them out of a hole. The next step is to do the M&A [mergers and acquisitions] dance until it gets a deal over the line.’

Interactive Investor’s Victoria Scholar said the share price reflects ‘the fact that investors are hoping that Bellway will return with another sweetened offer’. A tie-up would be the latest consolidation among housebuilders after Barratt agreed to buy Redrow for £2.5billion. Legal & General also revealed this week that it has put Cala Homes up for sale.

High interest rates have pushed up mortgage costs, leading to lower demand for new homes. Developers are therefore looking to grow by buying other companies.