Bellway (BWY), Crest Nicholson’s (CRST), Zigup (ZIG), Diversified Energy (DEC), Travis Perkins (TPK), SSP (SSPG) and Gym Group (GYM)
Crest Nicholson’s (CRST) board has warmed to an improved takeover approach from rival housebuilder Bellway (BWY).
Bellway submitted an improved offer of 0.099 shares for each Crest Nicholson share, as well as agreeing to honour previous dividend commitments. The revised approach works out at about 273p per Crest Nicholson share, or just over £700mn – a 28 per cent premium to the closing price on the day before Bellway’s initial approach was announced. It gives Crest Nicholson shareholders an 18 per cent stake in the enlarged business.
Statements issued by both boards said there was “compelling strategic and financial rationale for a merger”, with Bellway’s board pointing to the potential for synergies such as opening dual outlets on sites. The deadline by which Bellway needs to make a firm bid for Crest Nicholson was due to lapse tomorrow but has now been extended to 8 August. The boards warned there was “no certainty” a firm offer would be made, though.
RBC Capital Markets analyst Anthony Codling said the joint statements indicate that “in the absence of any better offers”, Crest Nicholson’s board would be likely to accept a formal Bellway bid. “Crest has been trading at a significant discount to book value for a long time, and has had several profit warnings within the past 12 months,” he said. Previous attempts to turn the company around had failed, and Bellway’s “tried and tested” management had a better track record of delivery, he added.
Last week, Crest Nicholson rejected a competing all-share approach from Avant Homes – a private housebuilder owned by activist Elliott Investment Management. Shares in Crest Nicholson rose by 3 per cent to 247p. MF
Accident services and van sales drive growth at Zigup
Revenue at Zigup (ZIG) – formerly Redde Northgate – jumped 23 per cent last year, fuelled by strong demand for insurance claims services and persistently high second-hand van prices. The rental side of the business was slower, however, with the average number of vehicles on hire down by 1.6 per cent. In the UK, the oldest vehicles were de-fleeted but supply chain hold-ups meant they couldn’t be quickly replaced.
Adjusted operating profits climbed by 13 per cent to £214mn in the period, which enabled management to raise the full-year dividend by 7.5 per cent to 25.8p. Zigup said its pipeline of business remains “healthy” and supply chain pressures are improving. JS
Read more: Redde or not? Transport group enters new phase as Zigup
Travis Perkins rebuilds from the top
Troubled builders’ merchant Travis Perkins (TPK) has appointed a new chair and chief executive.
Pete Redfern, the former chief executive of Taylor Wimpey (TW.) and an ex-board director of Travis Perkins, will take over as chief executive from Nick Roberts in September. Geoff Drabble, the current chair of packaging firm DS Smith (SMDS) and a former chief executive of Ashtead Group (AHT), will become a non-executive in October and will take over from interim chair Jez Maiden “as soon as his capacity allows”, the company said. DS Smith is currently negotiating a merger with larger US rival International Paper (US:IP).
Travis Perkins shares jumped by 5 per cent on the news but are still trading at less than half of their post-pandemic peak of 1,840p. Despite major restructuring and asset disposal programmes, the company was lumbering under a net debt burden of £922mn at the end of last year. MF
Read more: Even a small recovery will boost construction companies
Gym Group grows revenue
Gym Group (GYM) shares were up 7 per cent in early trading after the low-cost operator said that “positive trading trends have continued” in its first half to 30 June. Revenue was up 12 per cent in the period, underpinned by a 9 per cent increase in average revenue per member and a 4 per cent rise in membership numbers. The company is on track to open 10-12 new gyms in the current year.
There was also an update on the balance sheet, with the company refinancing its bank debt with a £90mn package split between a term loan and revolving credit facility. Management said net debt fell from £66.4mn to £54.6mn between the year-end and half-year point. CA
