The first float of a UK company this year cheered the City yesterday as housebuilder Crest Nicholson unveiled plans for a £500m return to the stock market.
The move is an early vote of confidence in prospects for 2013, coming as the FTSE 100 soared to pre-Lehman Brothers highs above 6100 despite a January scarred by the collapse of retailers and the threat of a triple-dip.
The listing, planned to raise £50m, will catapult Crest Nicholson back into the FTSE 250, nearly six years after it was taken private by a consortium including Scottish tycoon Sir Tom Hunter's West Coast Capital and HBOS for £715m. It comes ahead of another expected initial public offering in the sector by retirement builder McCarthy & Stone later this year.
BGC Partners analyst David Buik said the "timing was perfect". He said: "I see a lot of deals this year, private-equity exits and lots of M&A activity. At a time when the economy is not doing brilliantly, there is a bit of value out there."
But he cautioned: "At the turn of the century there were around 70 £100 million-plus floats a year. We are now doing around five to seven. Investors are more wary. If these things aren't priced to go like an absolute rocket, you can forget it."
Crest's management embarks on a roadshow of potential investors in two weeks' time. The original takeover, struck at the peak of the market in May 2007, saw the firm laden with £1.2bn in debt. Lenders took control in a restructuring two years later, wiping out Sir Tom. United States hedge fund Varde then swooped to snap up Crest's debt in 2011, and controls 60 per cent of the equity.
Deutsche Bank has a 20 per cent stake, with the original lenders and managers owning the remainder. Around 40 of the housebuilder's senior managers will end up with 10 per cent of the shares, worth around £50m, following the deal. HSBC and Barclays are the lead banks.