Crest Nicholson PLC (LSE:CRST) said it might support a new merger proposal from rival housebuilder Bellway PLC (LSE:BWY) that values it at around £700 million.
Surrey-based business Crest Nicholson has rejected two previous approaches but said Bellway had come back with a revised and higher offer.
Bellway is offering 0.099 of its shares for each Crest Nicholson, indicating a price of 273p per share including dividends.
Shareholders in Crest would hold 18% of the combined company if the deal goes through at this price.
Crest directors said the revised offer is “at a value that it would be minded to recommend unanimously” to its shareholders.
Newcastle-based Bellway now has until 5 pm on August 8 to make a firm offer or walk away.
Bellway’s new offer follows the entry of a potential third bidder, Avant Homes led by former Persimmon boss Jeff Fairburn, who achieved notoriety for his £90 million bonus one year.
Crest said it is reluctant to start discussions with Avant while a firm offer from Bellway was possible.
Consolidation within the housebuilding accelerated following the slowing of the housing market.
Barratt Developments and Redrow have agreed to a £2.5 billion merger that is being held up by a potential competition inquiry.