They can, I just tried it, and you then get the xenomass!
Stupidly, I forgot to count how many turns it took, at a guess I'm thinking around 60. It took far longer to grow back than it took for the aliens to turn blue (although I did have five nests in my borders, so maybe they turned blue fast). Anyway, awesome! I'm demolishing another now - when it grows back I'll have a single city producing 27 xenomass (and, in my head, being a place where humans and aliens live together in peace and love)!
If you are taking down nests just replace them with wells. The well is worth 3 food which the nest doesn't give. As long as you have one nest in your territory you will maintain blue status.
Wait until you've went to all that trouble to have the xenomass and friendly aliens, then a friendly sea dragon shows up by the shore and blockades your coastal tiles with that lovely algae and coral...