Bellway, a housebuilder, pulled out of the £720 million pound takeover bid for Crest Nicholson due to concerns over its smaller rival’s escalating costs after Grenfell Tower.
Bellway was reticent to disclose the reasons behind its withdrawal from the takeover of 273p per share last month. Crest’s board was reportedly blindsided by the decision, as it had previously stated that they were “minded” to recommend this takeover to their shareholders.
Sources in the city said that the cladding liability was one of the three issues that were raised during the due diligence. They also added that there were too many differences between the two parties regarding their valuations for Crest’s unsold houses and land bank.
Last week, the final report of the public inquiry was released and bereaved families of Grenfell victims attended a press event.
Last week, the final report of the Grenfell Tower investigation published the final report which highlighted the responsibility of private housebuilders to remove dangerous cladding.
Angela Rayner, vice prime minister said that only half of England’s 4,630 buildings with unsafe cladding have begun remediation work.
Downing Street has said that building developers who drag their heels could face jail time under new laws the government is considering.
Crest Nicholson has set aside £145million to cover future cladding liabilities. This was revealed in the June 2024 results.
Crest Nicholson is responsible for the remediation of 107 buildings taller than 11 metres. Another 156 are still to be assessed. Rivals in the industry say that Crest’s provision per property is lower than other companies and about half of Bellway’s per-property contingency.
However, this does not mean that Crest has understated its liability for remediation. Experts say that the cost of remediating cladding can vary greatly between buildings.
Sources within Crest have confirmed that Crest’s external auditors had thoroughly examined the company’s cladding provisions. Third-party consultants were also brought in to supervise the process.
Bellway Crest Nicholson have declined to comment.
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