Possible offer on the Horizon for struggling house builder Crest

LLOYDS Banking Group is mulling a preliminary takeover approach for Crest Nicholson, the house builder that fell into its control via a debt-for-equity swap during the credit crunch.

Business magnate Hugh Osmond is understood to have made the approach last week through his acquisition vehicle, Horizon.

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

Crest Nicholson was once a 50:50 venture between entrepreneur Sir Tom Hunter and HBOS, before the banking group collapsed during the financial sector's turmoils in 2008 and was rescued by Lloyds. Hunter is thought to have written off about 45 million on the Crest investment 18 months ago.

Lloyds declined to comment yesterday.

It is believed that Osmond has informally suggested a price of 290m-340m to Lloyds for Crest. The firm is focused in south east England and the Midlands and builds about 2,000 homes a year.

No actual offer has been made yet. Osmond is said to believe now is a good time to buy into the sector as housebuilding is believed to be at or near the bottom of the cycle.

One industry executive said: "There is a structural need for a lot more housing than is being built at present. Values are therefore at the bottom of the cycle, so it is probably a bit of a no-brainer for him (Osmond]."

Horizon declined to comment yesterday. The vehicle's chairman is Mike Fairey, the former deputy chief executive of Lloyds, who retired before the HBOS takeover.

It is understood Horizon is looking initially for one specific acquisition and that reports Osmond is looking to further consolidate the housebuilding sector are inaccurate. He is also said to be considering other sectors.

Horizon is understood to have about 400m in cash for an acquisitive strike, with additional debt facilities of up to 2.5bn.