BC Partners Cedes Control of Foxtons

LONDON (Reuters) – BC Partners, the private equity owner of Foxtons, has ceded control of the estate agency chain to its banks, resolving a year long standstill with the lenders, a source familiar with the situation said.

Under the terms of the debt-for-equity swap, BC Partners will inject 50 million pounds ($79.76 million) to remain the largest single shareholder in the business, renowned for its fleet of colourful Minis, the source said.

Bank of America Merrill Lynch (BAC.N) and Mizuho (8411.T), which backed BC Partners’ leveraged buy-out of Foxton in 2007 with 260 million pounds in loans, will jointly own a majority of the company’s equity.

Foxtons came to epitomise the woes of the private equity industry as plummeting sales pushed Foxtons into breach of the terms on its debt, as the credit crisis deepened.

The consensual agreement made over the Christmas period will ensure that BC Partners retains a key role in areas such as an eventual sale of the business, the source said.

In a statement made at the end of December, Foxtons Chief Executive Michael Brown said the business continues to trade profitably.

BC Partners declined to comment. Bank of America Merrill Lynch and Mizuho were not immediately available for comment. ($1=.6269 Pound)

(Reporting by Simon Meads and Quentin Webb, Editing by Douwe Miedema and Karen Foster)