Housebuilder Bellway has withdrawn its interest in a £720 million all-share offer for rival Crest Nicholson.

Its decision, announced to the London Stock Exchange, comes a week after it secured an extension to the bid timetable until 20 August.

In its statement Newcastle-based Bellway said it “remains confident that its robust balance sheet and operational strength, combined with the depth and quality of its land bank, will enable Bellway to deliver volume growth in the years ahead and support ongoing value creation for shareholders.”

It is just two months since Crest Nicholson rejected a revised and unsolicited £650m takeover bid from Bellway because it believed the all-share offer “significantly undervalued” the group.

Shares in Crest shares plummeted by 54.5p, or 20.7%, to 208.75p, while Bellway’s stock rose 116p, or 4.1%, to 2932p.

A tie-up between the two would have created a company with a combined turnover of £2bn and was expected to follow the merger of fellow Newcastle based builder Barratt and Redrow in a £2.5bn deal announced in February.

The board of Crest Nicholson said it noted the announcement and, as previously announced, had engaged with Bellway “in relation to a possible all-share offer for Crest Nicholson in response to a series of unsolicited proposals from Bellway.”

It added: “As outlined in its half year results on 13 June 2024 for the period ended 30 April 2024, Crest Nicholson remains confident in its standalone prospects, in particular given conclusion of the review of provisions for completed development sites supported by external consultants, its highly attractive land portfolio and the new leadership of Martyn Clark.”