Rivals circle Crest as merger talk intensifies

It follows a bid for Crest, thought to be worth £350m, from Horizon, the listed vehicle of former Pizza Express entrepreneur Hugh Osmond, which was confirmed by both companies this week. However, sources close to the situation said the talks were at an early stage, and the banks have said they are open to other offers.

Building understands a number of parties are considering whether to lodge a rival bid. A banking source close to the situation said: “There are a number of interested parties. And I imagine others will come out of the woodwork after Horizon publicly declared its interest.”

The housebuilder has been 90% owned by a consortium of banks since a restructuring last year resulted in a £600m debt for equity swap. Currently Lloyds HBOS is the largest single shareholder in the company.

A banking source close to Persimmon said: “Persimmon would have run the numbers on Crest 100 times before. I can’t imagine it’s not doing it now.”

Galliford Try, which declined to comment, is also thought to be considering a bid.

Last month Persimmon was linked to an offer for rival Bovis Homes, and Mike Farley, the housebuilder’s chief executive, has previously said he would consider a rights issue to fund an acquisition if the right opportunity came along.

Shares in listed housebuilders jumped on Monday on speculation Horizon’s bid was the start of wider merger activity in the sector (see chart). However, analysts said it was most likely further bids for Crest would come from private equity firms that would be keen to take on its existing management.

Bellway and Berkeley Group ruled out acquisitions. Tony Pidgley, chair of Berkeley, said: “We’re still buying enough land in the open market – Crest adds nothing to us.” Alistair Leitch, Bellway’s finance director, said: “It’s about land, not taking on another firm or its brand.”

Persimmon declined to comment.