Market Reaction - Crest Nicholson

 - Bellway confirmed it made a takeover proposal for Crest Nicholson, though Crest Nicholson rejected the bid. 

- Under the terms of the bid, Crest Nicholson investors would have received 0.093 of a Bellway share for each Crest Nicholson share. 

- Crest Nicholson shares were valued at 253.00 pence each, making the company's equity overall worth around GBP650.0 million. 

- Crest Nicholson shareholders would have owned 17% of the enlarged firm. 

- Bellway believes in the growth opportunity a tie-up would provide and sees compelling strategic and financial rationale for the combination. 

- A combination of Bellway and Crest Nicholson would bring together the strengths of each business and reinforce Bellway's position as a leading UK housebuilder. 

- Bellway believes the combination would deliver significant operational synergies and support sustainable shareholder returns. 

This was great news for Crest Nicholson shareholders and comes in stark contrast to yesterdays poor trading update, in which the company ended losing 10% of their market value.

Share Price: 243.15

Valuation Price: 279.00

Variance: 12%

The company share price is starting to trade a bit closer to my valuation level, its one to watch for, I do not rank the company as being particularly well run!

Volume Traded: 3.25m

Average Volume Traded: 1.09m

There was significantly higher trading volumes for Crest Nicholson today, although there should be, there has been a lot of news on the company in the past 2 days.

Chart:

The company on the 13th saw a poor trading update which saw the share price crash, only for the news of Bellways interest in a tie up, valuing the company at 253p. The fact that the company rejected this offer outright is good, although based on my own valuation I am not sure that the company is going to see a tie up higher than the 279p level. 

How was the movement? Was it gradual or morning immediate?

I had poor judgement this morning on Crest Nicholson. Because I already own a significant amount of these share, I decided not to place a day trade on the share price rising further, this was not good when they were trading at 233p shortly after the open.

This was a great opportunity to buy some Crest Nicholson shares at a great price, considering the rejected offer price of yesterday.