Agency owners cash in on improving UK property sector

LONDON Wed Aug 14, 2013 9:49am EDT

LONDON Aug 14 (Reuters) - Oaktree and Apollo have sold 200 million pounds worth of shares in real estate agents Countrywide, cashing in on an improvement in the UK housing sector that is expected to see a rival kick off its own float this month.

British UK house prices grew by the most since 2006 in July, according to a survey this week and official data shows house prices in London, which typically lead the rest of the country, jumped 8.1 percent year-on-year in June.

The jump in activity has underpinned a more than 60 percent rise in Countrywide shares since its stock market launch in March and a financial source said the launch of a flotation of rival Foxtons was now being planned for as early as August 27.

Countrywide Holdings, whose 46 brands include Hamptons International and Bairstow Eves, is the biggest player by revenue in a market that was battered by the 2008 financial crisis but is steadily recovering.

Countrywide's three private equity owners Alchemy Partners, Oaktree Capital Management and Apollo Global Management did not sell any shares in its initial offer in March, preferring to hold on to the bulk of their substantial stakes in the firm.

On Wednesday Countrywide said Oaktree had sold 20.4 million shares, reducing its holding to 27.6 percent from 36.9 percent, while Apollo had sold 14.6 million shares, taking its stake down to 10.9 percent from 17.5 percent. Alchemy held on to its stake.

A source close to the deal said the shares had been sold to institutional investors at 570 pence each, a 4.5 percent discount to Countrywide's Tuesday closing share price of 597 pence, and raising a total of 199.5 million pounds ($309.2 million) for the sellers.

House prices have been bolstered by government incentives to buy new-build property, with many economists warning it could fuel another house price bubble.

Foxton's majority owners, private equity firm BC Partners, are gearing up for a listing of the high-profile chain - which has 42 offices, mainly in London - according to a person familiar with the deal.

Stock market listings don't usually happen during August, the peak summer holiday period in Europe, but with many bankers returning to work in late August, launching its sale then would allow Foxtons to get out ahead of an expected September rush.

Foxtons, known for its distinctive Mini Cooper cars and glitzy high street stores with coloured chairs and drinks fridges, is hoping to be valued at around 500 million pounds on its market debut, the person familiar with the matter said.

BC Partners has appointed Credit Suisse, Canaccord Genuity and Numis Securities to run the share sale, a source told Reuters in June.

Foxtons and BC Partners declined to comment.

BC Partners has had a chequered history with Foxtons since first buying it in 2007. The chain came to epitomise the woes of the private equity industry as the credit crisis deepened and 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.

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