Sunday, January 25, 2015

Foxtons Gain in London Debut Marks U.K. Broker’s Turnaround

Foxtons Group Plc gained 16 percent on the first day of trading in London, marking a turnaround for the property broker three years after it was rescued by lenders when the housing market collapsed.

The shares closed at 267 pence, giving Foxtons a market value of 753 million pounds ($1.2 billion). The London-based broker and its investors sold 390 million pounds of shares at 230 pence each, according to a statement today.

Foxtons, known for the fleet of Mini Coopers used by employees to show homes to clients, is benefiting from London's booming property market, where the average price of a home climbed 9.7 percent in July from a year earlier, according to the U.K.'s Office for National Statistics. BC Partners Ltd., which bought Foxtons in 2007, also sold shares in the IPO.

"House prices are above pre-2007 levels," said Anthony Codling, an analyst at Jefferies Group LLC. "In a market with such strong fundamentals, people have got limited ways to access the U.K. housing market recovery."

Investors committed to buying all Foxtons shares on offer on the first day that investors were allowed to buy into it, people with knowledge of the matter said on Sept. 10.

Zoopla IPO?

Zoopla Ltd, which operates a property website, is considering an IPO that could value the company at more than 1 billion pounds, the Sunday Times reported earlier this month. It would be "a logical move" for housing-market companies to accelerate listing plans, Codling said.

BC Partners bought Foxtons, founded by Jon Hunt in 1981, for about 390 million pounds before losing control in 2010 after creditors reorganized the broker's debt. Last year BC Partners bought back a majority stake, the Daily Telegraph reported.

All but two of Foxtons's 42 branches are in London. Most of the homes it sells are priced at 200,000 pounds to 1.4 million pounds, the company said on Aug. 27.

The share sale comprised a primary offering of 55 million pounds and 335 million pounds of secondary sales by shareholders, directors and employees.

Credit Suisse Group AG (CSGN) and Numis Securities Ltd. managed the sale, along with Canaccord Genuity Ltd. Rothschild acted as financial adviser.

Volumes of IPOs in Europe, the Middle East and Africa have nearly tripled to about $15 billion this year, according to data compiled by Bloomberg. Deutsche Bank AG is ranked first in managing the sales.

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