The housebuilder Crest Nicholson made a triumphant £641m stock-market return as major investors piled into the biggest float of a British company since the launch of the insurer Direct Line last October.
Demand for Crest's shares was such that the 50-year-old company got the float away near the top end of the expected range, at 220p. Institutional investors immediately sent the price roaring more than 10 per cent higher as 9 million shares changed hands in the first minutes of grey-market trading. It closed on a high of 255p.
The heartening news brings hope of better times for the London IPO market with a number of other big deals in the offing.
Crest was taken private by the Scottish entrepreneur Sir Tom Hunter and HBOS in May 2007. The original takeover, at the peak of the market, saw Crest laden with £1.2bn debt. Lenders took control two years later in a £630m debt-for-equity swap and wiped out Sir Tom's stake, the size of which was undisclosed.
The US hedge fund Varde snapped up Crest's debt in 2011 before converting it into a 60 per cent equity stake. Investors including Varde and Deutsche Bank cashed out £169m, with Varde selling £71m in shares and reducing its stake to 35 per cent as the company raised £225m.
About 40 of the builder's senior managers, including chief executive Stephen Stone, will end up with 10 per cent of the shares, worth £50m.Reuse content