Stunning stock market debut for Foxtons as shares soar 20 per cent in minutes
Management set to make fortunes cashing out part of their 20% stake in the business
Friday 20 September 2013
Foxtons made a stunning stock market debut today as investors betting on a booming London housing market sent the estate agent’s value soaring £140 million within minutes.
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 £649 million. But the City instantly waded into the stock, sending shares up more than 20%, or 48.75p, to 278.75p — pushing the market cap close to £790 million. More than 50 million shares changed hands in the first hour of trading, dealers said.
Management, including chief executive Michael Brown, were set to make fortunes cashing out part of their 20% stake in the business valued at around £160 million following today’s surge.
IG’s Chris Beauchamp 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 5% or 6% are common but this is something else.” ETX Capital’s head of trading, Joe Rundle, also reported high levels of demand as clients “expressed their general bullishness over the UK housing market recovery”.
The agent, founded by Jon Hunt,pictured, in 1981, has 42 branches, all but two of which are in London — where prices have risen almost 10% in the past year. Foxtons said in float documents 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 sold in the City, one in four in Ladbroke Grove and one in every five flats sold in Chelsea.
But the wider market outside London is also showing recovery signs as a host of government support schemes boost the property market, including the Bank of England’s Funding for Lending scheme and the Government’s Help to Buy budget initiative.
The float also represents a belated success for private equity firm BC Partners, which bought the company from Hunt at the peak of the housing market in 2007 for £360 million, but business plunged in the wake of the credit crunch. BC Partners ceded control in 2010, before taking majority ownership again last year with a £50 million cash injection, and it is understood that the company has doubled its investment in the business.
Foxtons is the second major estate agent to float this year, after Countrywide — whose agencies include London’s Hamptons and upmarket Sotheby’s — returned to public markets after a six-year absence. Countrywide’s shares are up more than 60% since its March float. Panmure Gordon’s Keith Baird said: “Countrywide is more diversified but Foxtons is a London player. London has become a banker for a lot of international money. For them it is like buying a gold bar.”
Brown said: “We welcome our new shareholders to Foxtons and we are looking forward to the next stage in the development of the business as a listed company.”
Actress sees off speculation about her appearance in an amazing way
Powerful images of strays taken moments before being put down
The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon
Children's bookseller wins The Independent's new author search
- 1 Salisbury ranked seventh-best city in the world to visit in Lonely Planet’s Best in Travel 2015
- 2 Disney announces new female-led film Moana
- 3 Banksy has not been arrested: Internet duped by fake report claiming artist's identity revealed
- 5 Russell Brand threatened with arrest after filming outside Fox News headquarters
Chicago voter tells Obama 'don't touch my girlfriend' – Obama stays super smooth
Oscar Pistorius: The brutal prison life that awaits disgraced athlete
Banksy has not been arrested: Internet duped by fake report claiming artist's identity revealed
Raphael Ravenscroft dead: 'Baker Street' musician who played the most famous saxophone solo for just £27, dies aged 60
Darren Vann: Indiana man arrested for murdering teenage prostitute confesses to six other murders - and police fear more
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Jose Manuel Barroso warns David Cameron against making 'historic mistake' over immigration reforms
Of course, teenage girls need role models – but not like beauty vlogger Zoella
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...