The UK’s biggest estate agency today fired the starting gun on a £650 million float which could net millions for its top executives.
Countrywide, which operates 931 branches and agencies including London’s Hamptons and upmarket Sotheby’s, sells one in 11 of all homes sold in the UK.
It is returning to the stock market after an absence of more than five years, when it was taken private by buyout firm Apollo for £1.1 billion at the peak of the market in 2007.
The offering will raise £200 million and catapult the firm into the FTSE 250. It follows housebuilder Crest Nicholson’s return to public markets last week as the Bank of England’s Funding for Lending scheme boosts conditions in the market.
Countrywide went through a debt restructuring in 2009 which left private-equity investors Oaktree, Apollo and Alchemy with 88% of the shares. Depending on the eventual value of the float, managers including chief executive Grenville Turner will hold between 4% and 10% of the equity. All managers and private-equity investors have agreed to lock up arrangements preventing them from selling shares for at least six months. Turner said more than £200 million in costs had been stripped out of the company since 2007 while the firm has also made 41 acquisitions including Hamptons and Sotheby’s which boosted its presence in London and the South-East. The firm has also boosted its lettings business. “There is more to come. Even in the downturn there are opportunities for companies with strong balance sheets... we’ve seen a half-size market for the last five years so there is a lot of pent-up demand.”
The proceeds of the float will be used to pay off £250 million in bonds taken on in 2009 which cost it 10% a year in interest, taking its average debt costs down to 3%.