Crest builds bid defence against Heron

WHEN John Calcutt, chief executive of under-siege housebuilder Crest Nicholson, updated shareholders at the company's annual meeting barely a fortnight ago, many thought it was his swansong.

Calcutt, 58, had a lump in his throat as he used a photograph of the Victorian street in Manchester where he was born to show how Sixties planners had destroyed poor but close-knit communities.

The next slide showed how rundown high-rise blocks erected in their place were now the target of Crest's urban regeneration schemes from Kent to Bristol that are worth £3.3bn in projected sales. Calcutt confessed afterwards that he was driven as much by a personal mission to improve living conditions as by the desire to push up shareholder returns.

'I came from that community in Manchester. Everyone was in poverty but everyone knew everyone else. Now with what the Sixties did, it's all yobbos and dereliction. What I am about is rebuilding a permanent community.'

But his plans to carry on what he has been doing at Crest for 31 years may soon be cut short. The board, chaired by City dealmaker John Matthews, has property magnate Gerald Ronson knocking on the door with a £481m proposal.

Danny Kitchen, deputy chief executive of Heron International, the company Ronson is using for his takeover approach, was sitting silently in the 100-strong audience.

Heron, which already owns 23.4% of Crest, has indicated that it may offer up to only 430p per share in cash, has asked for access to the builder's books and threatened it may go hostile. Crest has rejected the approach and refused to open up its books.

The Takeover Panel has given Heron until 4 May to make a formal offer, or it will be banned from making a further approach for six months.

Stephen Rawlinson at broker Arbuthnot reckons an offer of 500p a share, or £560m, would get Heron through the door for serious talks. But he believes that, based on Calcutt's latest trading update, shareholders should be pushing for at least 600p, valuing the business at £675m.

Calcutt and Matthews are, however, thought to be drawing up defence plans against any Heron offer. Builder Persimmon is widely tipped as the most likely white knight. Others, from Barratt to Bellway, would fit with Crest's regeneration ethos.

Matthews admitted after the annual general meeting that everything had a 'right price'. Crest shareholders await to see what is on offer.