Zoopla to test the market in £1bn float


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The Independent Online

Zoopla yesterday moved a step closer to a near £1bn stock market valuation by setting a price range for the shares in what will be a test of investor appetite after several other lacklustre floats.

The online property advertising group's shares will be valued between 200p and 250p in the initial public offering, making Zoopla worth £940m at the mid-range when it begins trading around June 24.

However, the float market showed fresh signs of fatigue when OneSavings floated yesterday at 170p – at the bottom of expectations – after the fledgling bank had earlier set a share price between 170p and 225p.

Over-50s group Saga also struggled last week on its debut at 185p — at the low end of its target of 185p to 245p.

Zoopla chief executive Alex Chesterman said it has seen a "strong level of investor interest" since announcing its float.

Traffic on Zoopla's website and mobile apps is up 37 per cent in the eight months to May against a year earlier as the UK property market booms. More than half of its traffic is now on mobile.

Daily Mail and General Trust holds almost 53 per cent of Zoopla and is set to land a windfall worth as much as £500m.

DMGT invested only around £80m in Zoopla, the second biggest player in online property advertising in Britain behind Rightmove.

Broker Liberum Capital said the £940m valuation was slightly below its £1bn estimate.

The IPO market has been at its busiest since 2007, with shares in Royal Mail and Foxtons rocketing on their debuts last autumn, but some investors are fretting it may have peaked.

Saga shares, up 2p yesterday at 174.5p, remain below their offer price. OneSavings climbed 5.9p to 175.9p on its debut.

Another float could be in the pipeline as EE, Britain's biggest mobile company, said it wants to revisit plans for an IPO after the summer.

Gervais Pellissier, deputy chief executive of Orange, the co-owner of EE, admitted that it had had "difficulty" persuading investors that the company is a "growth story" amid declining telecom revenues.