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Crest Nicholson a takeover target, shareholder claims

Jack Torrance
A top investor in Crest Nicholson said it seemed like a likely takeover target - Copyright 2013 Bloomberg Finance LP

One of Crest Nicholson’s top investors said it was likely to find itself in the crosshairs of a takeover bid after a series of profit warnings and uncertainty over how Brexit could hit the housing market dragged its share price to historic lows. 

Alastair Gunn of Jupiter Asset Management, whose funds control 2.6pc of the housebuilder’s shares, said “a number of players within this industry” including private equity funds, other listed housebuilders and financial giants like Legal & General had the financial clout to take advantage of the situation. 

Mr Gunn compared Crest to the similarly-sized Bovis, which is also focused on the south of England and attracted unsuccessful bids from rivals Redrow and Galliford Try last year after a rout in its shares. 

He said: “For anybody who is underweight in London and the south-east, Crest is a big opportunity.” Having already lost 45pc of their value in the past year, the FTSE 250 company’s shares fell another 8pc last Wednesday after it warned sales had failed to pick up in the normally brisk autumn selling season. 

Crest risked inflaming tensions with corporate governance campaigners as it signalled its executive chairman and former chief executive, Stephen Stone, could remain at the company’s coal face for longer than previously planned.   He had been due to hand over executive responsibilities to Patrick Bergin, chief executive, next April, and remain as non-executive chairman for a further two years. 

But on Wednesday the company said Mr Stone had been asked to lead the roll-out of its new strategy, “supported by [Mr] Bergin”. Mr Stone told The Daily Telegraph the change didn’t “necessarily” mean he would remain executive chairman beyond April and that he would “very much like to stick to the current timetable” but did not rule out staying on longer. 

He said: “The board has asked me to deliver this amended strategy, and that’s what I’m going to do. I wouldn’t want to be pinned down to an actual timetable, but I can assure you this isn’t a long-term change.” 

A fifth of voting shareholders opposed Mr Stone’s appointment in March and 9.5pc withheld their votes following criticism by influential shareholder groups ISS and Pirc. 

Governance experts tend to frown upon the appointment of a chief executive as chairman of the same company and prefer chairmen to take a non-executive role.  Mr Stone works two to three days a week and earns £300,000 a year, significantly below his prior pay as chief executive, but twice that of his non-executive predecessor William Rucker.