UPDATE 1-Housebuilder Crest Nicholson eyes stock market return
LONDON Jan 21 (Reuters) - British housebuilder Crest Nicholson on Monday said it would launch an initial public offering in a bid to return to the stock market, five years after it was taken over during the housing crash.
The 50-year-old company said the offer would comprise new and existing shares and that the primary proceeds from the offer, around 50 million pounds ($79 million), would be used to pay outstanding borrowings.
"Crest Nicholson has a long and successful history as a public company and today we have announced our intention to return to the stock market," Chief Executive Stephen Stone said.
"The housing market is entering a period of gradual recovery and with our emphasis on the south of England, including London, and the continued support for the new homes market from (the British) government, we are well positioned to generate value for shareholders," he said.
A source told Reuters in September that the company was actively exploring a flotation on the London stock market and described a 500 million pound valuation at the lower end of the possible range.
Crest Nicholson, one of Britain's biggest housebuilders, was hit hard by the slump in the UK housing market after years of easy credit inflated prices.
It was taken private by Scottish entrepreneur Tom Hunter and mortgage lender HBOS in 2007 and is now majority owned by U.S. distressed investment fund Varde Partners, after a series of deals last year.
The company said its offer to list would also incorporate a sale of existing shares by some institutional shareholders, including Varde Partners and Deutsche Bank AG. It expects the free float to be a minimum of 35 percent of the issued share capital of Crest Nicholson.
It expects the offer to complete in February and to become eligible for inclusion in the FTSE UK indices at the quarterly review at either March 2013 or June 2013.
British housebuilders have so far beaten a sluggish housing market by buying up land cheaply during the recession, building in the south of England where house prices have stayed strong and have also been helped by government schemes targeted at boosting demand.
At the end of October, the company had a short term land bank of which over 95 percent was in the south of England, with 16,959 plots on 72 sites and an estimated gross development value of 3.9 billion pounds.