Shares at Crest Nicholson have fallen after Bellway announced that it was no longer interested in a takeover deal of the housebuilding firm.

The firm has not given a reason for walking away from the deal, having had its bid of £720m by Crest Nicholson rejected in July.

Reuters has reported that shares at Crest Nicholson have dropped by 9% following the announcement, despite increasing by 15% since the potential deal was announced two months ago, when the offer initially stood at £620m.

It comes after Avant Homes also saw its bid for the firm rejected in July.

In a statement, Bellway said: "Bellway 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."

Head of money and markets at Hargreaves Lansdown, Susannah Streeter, added: "The bidding war for Crest Nicholson is crumbling after Bellway walked away from its high-vis bid for the firm. Investors’ disappointment is reflected in the share price slide, with the stock falling by more than 17%. Shares are not back at the level they were before the first bid from Bellway, indicating that there is a glimmer of hope Avant Homes may come through with another offer.

"It’s not clear exactly why Bellway has walked away after a deal between the two looked close, but the talks between the two clearly raised some concerns that a long-term tie-up may not justify the £720m price tag. Both firms remain bullish about their stand-alone prospects, helped by the recent interest rate cut, with more reductions expected on the horizon.

"With the Government determined to power ahead with its plan to build 1.5 million new homes, and steam roller planning obstacles, there is confidence about opportunity and demand going forward. But a fresh bid for Crest Nicholson can’t yet be ruled out, at a time of consolidation in the industry."

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