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Brokers mark up Crest shares on takeover bid

FINANCE

ANALYSTS have raised their share price target for Crest Nicholson after last week's informal takeover approach for the house builder from Heron Corporation was rejected by the company.

Broker Citigroup Smith Barney has raised its forecast for Crest's share price from 390p to 480p to reflect what it says is the higher probability that Crest will be taken out in the next couple of months.

Earlier this week Crest's share price was hovering around 440p, valuing the group at around £494 million - above the 345-430p range in which Heron said it might price an offer.

Crest chairman John Matthews said an offer even at the top of this range would significantly undervalue the company.

He said Crest had given Heron, headed by property tycoon Gerald Ronson, the opportunity to clarify its proposals and Heron had refused to do so.

Heron, which owns a 23 per cent stake in Crest, is seeking more detailed information on the house builder, particularly its large land bank of around 15,000 plots, before pricing a bid. It has reserved the right to launch a bid above the 430p level.

If a bid did materialise, few analysts expect rival bids to emerge from 'white knights' among other house builders.