Crest Nicholson hires adviser as sale looms

Morgan Stanley has been hired as a financial adviser to "assist Crest Nicholson in reviewing its options for the future with its stakeholders".

The housebuilder was put into takeover play last month when entrepreneur Hugh Osmond made a preliminary bid approach via his Horizon acquisition vehicle.

Crest was seized by its lenders, led by taxpayer-backed Lloyds, in a debt-for-equity swap last year. Lloyds, 41 per cent government-owned, is the largest stakeholder in the company, with a 25 per cent holding.

The banking consortium wrote off 630 million of debt in return for a 90 per cent stake in Crest, with the remaining 10 per cent held by the company's management.

Osmond – who built up Pizza Express and created Punch Taverns, now Scotland's biggest pub chain with nearly 400 outlets – sees opportunities to financially turn round companies crippled by debt in the recession.

It is believed that Osmond has informally suggested a price of between 290m and 340m for Crest, whose activities are focused on south-east England and the Midlands and builds about 2,000 homes a year.

Crest was once a 50:50 venture between Scots entrepreneur Sir Tom Hunter and HBOS, before the banking group collapsed during the financial convulsions of 2008 and was rescued by Lloyds.

Hunter is thought to have written off about 45m on the investment 18 months ago.

Horizon said yesterday that there had been no new developments since its announcement last month and repeated that it was looking at a range of companies.

Horizon's chairman is Mike Fairey, the former deputy chief executive of Lloyds, who retired before the HBOS takeover.

It is believed Osmond and Fairey think now is the time to enter the housebuilding sector because values are near bottom following the industry slump.