Zoopla heads listings rush but worries emerge over market conditions

 

Zoopla led a stampede of companies looking to float in London in the most bullish conditions since 2007, with four new stock-market listings announced with a combined potential value of £4.5 billion.

But concerns that the market is peaking were fuelled after clothing retailer Fat Face, which is chaired by Ocado boss Sir Stuart Rose, pulled its initial public offering because of “current equity market conditions”.

It comes a day after old-age group Saga warned its planned float price will be at the lower end of expectations.

Zoopla, the online property advertising group in which Daily Mail & General Trust has a near-53 per cent stake, is the highest-profile debutant with a likely valuation of around £1 billion.

Other floats announced today included Liverpool-based discounter B&M European Value Retail, chaired by ex-Tesco boss Sir Terry Leahy, which could be worth £2 billion, and Hungarian low-cost airline Wizz Air, with a mooted valuation of  £1.2 billion.

Boutique fund manager River and Mercantile is the fourth new entrant, with a possible value of up to £200 million.

Zoopla chief executive Alex Chesterman played down concerns about the IPO market being flooded. “We think there is significant investor interest in our business, which is high growth and high margin,” said Chesterman, who set up Zoopla in 2007, after earlier success as a founder of movie rentals business LoveFilm. Chesterman’s 8 per cent stake is potentially worth £80 million.

He insisted Zoopla was not vulnerable if the housing market ran into problems. “The property market is still substantially below where it was in the early 2000s in terms of transactions and even pricing.”

Zoopla did not announce a valuation but investors including DMGT, a minority shareholder in the London Evening Standard, intend to sell at least 25 per cent.

DMGT chief financial officer Stephen Daintith hailed a “really healthy return”, saying the company has invested only £80 million in its digital property business. It could get a sixfold return.

The owner of the Daily Mail is also selling Jobsite as it exits most of its consumer-facing digital “classifieds” businesses after a decade of online expansion.

“We thought these businesses would be more likely to grow in the hands of others,” explained Daintith, who said DMGT will use the experience to help bolster MailOnline.

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