Crest Nicholson (CRST), Shell (SHEL) and Glencore (GLEN)
Sky News has reported that Crest Nicholson (CRST) has rejected a buyout approach from Avant Homes, a private housebuilder owned by activist investor Elliott Management. Shares in Crest Nicholson climbed 10 per cent on the news, to 268p, adding to the sector’s gains in reaction to Labour’s election victory. Sky reported that Avant had put forward an all-share offer in the past 10 days.
Bellway (BWY) is also looking at Crest Nicholson, and has a week left before a Takeover Code deadline to up its all-share offer to a level that interests the housebuilder’s board. Another all-share offer, Bellway’s proposal valued Crest Nicholson at around 253p, so it will need to hike this considerably to swing the directors given the industry’s share price performance in recent weeks. Crest Nicholson had not confirmed the Avant offer at the time of publication. AH
Shell flags up to $2bn in impairments for Q2
Slamming the brakes on an almost-completed multi-billion-dollar project is always going to hit the balance sheet, and Shell (SHEL) said this week’s decision to pause work on a new Dutch biofuels plant would result in a $600mn-$1bn impairment for the June quarter. The Rotterdam plant was expected to go online this year. Shell said work had stopped so management could “assess the most commercial way forward for the project”.
The June quarter update was largely within guidance, although Jefferies analyst Giacomo Romeo said earnings forecasts would likely drop 5-10 per cent from around $6bn. This is down from $7.7bn in adjusted earnings from the first quarter. AH
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Glencore to close Teck deal next week
Mining and trading giant Glencore (GLEN) will complete its takeover of Teck Resources’ (US:TECK) coal assets next week, after getting a green light from Canadian authorities on Thursday. The $7bn (£5.5bn) deal for Elk Valley Resources will see Glencore add over 20mn tonnes of metallurgical coal production to its portfolio, a significant increase on the 7.5mn tonnes that came from its Australian metallurgical coal mines last year. The company’s coal unit is dominated by thermal coal, with production of around 100mn tonnes last year.
The Elk Valley acquisition is the first step in a radical restructuring of Glencore, in which the coal assets will be spun off from the metals and trading divisions, likely next year. To get the green light, Glencore has committed to keeping Canadians in key managerial roles as well as a host of other Elk Valley commitments, such as funding a cancer wing at a hospital near one of its mines. AH
