Top staff at estate agent Foxtons made instant fortunes in an £87m windfall yesterday as shares rose a stunning 16 per cent on the first day of conditional dealing.
The agent – famed for its aggressive sales style and brightly coloured Minis – was already priced at the 230p top end of the range for its heavily oversubscribed offering, valuing the company at £649m.
But the surge in demand as investors looked to gain exposure to a booming London housing market left the estate agent’s shares 37p higher at 267p at the close of trading after a frantic start, making Foxtons worth £790m.
According to the company’s prospectus, 19 senior managers, including chief executive Michael Brown, sold 50 per cent of their holdings in the firm yesterday.
Mr Brown offloaded 22.7 million shares, netting a £62m payday based on the closing price. In addition, 16 of the 19 staff also landed share payouts of more than £1m each after selling half their stake.
The flotation represents a belated success for private-equity firm BC Partners, which bought the company from founder Jon Hunt at the peak of the housing market in 2007 for £360m before business plunged in the wake of the credit crunch.
BC Partners ceded control of Foxtons in 2010, but took majority ownership again last year with a £50m cash injection, and it is understood that the company has doubled its investment in the business.
Chris Beauchamp at spread-betting firm IG said: “I can’t remember the last time I saw shares in a major company move so much on the first day of trading. Movements of five or six per cent are common but this is something else.”
All but two of the estate agent’s 42 branches are in London, where house prices have risen by almost 10 per cent in the past year.
However, the firm said in the flotation documents that it had identified “at least 60 additional local markets” and plans to open up to 10 branches a year between 2014 and 2018.
Between January 2011 and December 2012, Foxtons sold one in every three homes on the market in the City and one in every five flats which changed hands in Chelsea.Reuse content