(Reuters) – Private-equity backed British estate agent Foxtons said it plans to sell half the company on the London stock market next month, aiming to ride a recovery in the country’s housing market.
The agent, majority owned by BC Partners, said the initial public offering (IPO) would include 55 million pounds ($86 million) of new shares.
A division controlled by BC Partners will also sell part of its stake and executive directors of the London-based company, known for the distinctive Mini Cooper cars driven by its sales staff, will be allowed to sell their shares.
Foxton begins marketing its IPO to investors ahead of an expected rush of autumn stock offerings which could include the privatisation of Britain’s Royal Mail postal service and the sale of some of the government’s stake in Lloyds Banking Group .
Last month a person familiar with the matter told Reuters that Foxtons was hoping to be valued at around 500 million pounds on its market debut, meaning its selling shareholders could pocket nearly 200 million pounds.
The sale follows a successful stock market debut by Britain’s largest estate agent Countrywide Holdings in March, and comes as government schemes to free up mortgage lending and boost buyer confidence fuel a rise in housing transactions.
British UK house prices grew by the most since 2006 in July, according to a survey from the Royal Institution of Chartered Surveyors, the same month that the British Bankers Association said banks approved the highest number of mortgages since January 2012.
Shares in Countrywide have risen more than 65 percent since its debut. Earlier this month two of its private equity owners sold 200 million pounds worth of stock.
BC Partners has had a chequered history with Foxtons since first buying it in 2007. The estate agency chain came to epitomise the woes of the private equity industry as plummeting sales pushed it into breach of the terms on its debt.
BC ceded control of Foxtons to its lenders in 2010, before taking majority ownership again last year.
Foxtons said it will use proceeds from the IPO to help repay all its remaining debt, but did not quantify the total figure.
The company, which has 42 offices, focuses on property sales of between 200,000 pounds and 1.4 million pounds, a price range that made up 78 percent of London sales in 2012.
It said its first-half revenue of 62.6 million pounds was 10.5 percent higher than the same period last year while adjusted earnings before interest, tax, depreciation and amortization rose 14.3 percent.
The company said it initially intends to target an annual dividend of between 35 and 40 percent of after-tax profits.
Credit Suisse and Numis Securities are acting as joint bookrunners on the Foxtons sale, and Canaccord Genuity as co-lead manager. Rothschild is acting as financial adviser.