Countrywide valued at £800m on return to the stock market

Countrywide, which has 931 branches and trades through brands including Bairstow Eves, Gascoigne-Pees and Hamptons International, began conditional dealings at 350p a share before rising 11 per cent to around 390p.

It is another boost to the London market after last month’s successful launch of shares in housebuilder Crest Nicholson and the debut of general insurer Direct Line, which has also made progress since October.

And insurer esure, which trades as Sheila’s Wheels and comparison website Go Compare, is currently seeking a valuation of more than £1bn as part of its stock market flotation due later this month.

Countrywide will pocket just under £200m from the flotation, which involves the sale of a 26.7 per cent stake in the company.

It was taken private in 2006 but three years later was forced into a £641m debt-for-equity swap with lenders including Oaktree Capital, Apollo Global Management and Alchemy. They have not sold any of their shares as part of this week’s offer.

Countrywide is banking on a recovery in the housing market to lure in investors amid signs of growing demand for new issues.

Countrywide’s successful share sale reflects a recent upturn in companies going public.

There has been growing investor confidence in Britain’s housing sector, with housebuilders reporting robust profits despite the mixed economic picture.

The company raised £200m after pricing the offering at 350p, the top end of its initial range. It plans to pay down debt and expand the business. Countrywide’s private equity owners Oaktree Capital, Apollo Global and Alchemy are not reducing their stakes and have agreed not to sell any shares for six months after the listing completes.

“We are excited to be returning to the markets as a transformed business with a strong and diverse shareholder base,” chief executive Grenville Turner said yester- day.

The 27-year-old company had been listed between 1986 and 2007, before Apollo Global took it over for £1.1bn at the height of Britain’s property market boom.

It is now majority owned by Oaktree Capital following a debt-for-equity swap in 2009.

Countrywide, which sells one in every 11 homes in Britain, said last month 2012 earnings rose 12 per cent to £63m before tax, depreciation and amortisation and excluding one-off items.

Recent buoyant conditions for housebuilders have been partly due to Government schemes to encourage mortgage lending and an increase in the availability of cheap development land.

Countrywide’s flotation also reflects strong European stock markets, which have recently lured a stream of companies to go public, such as housebuilder Crest Nicholson and insurer Direct Line.

Others planning flotations include Italian notebook maker Moleskine and German chemical company Evonik.

While new listings in London have in recent years been dominated by international companies, the IPOs (initial public offerings) of Crest and Countrywide suggest that more British firms could float as their private equity owners become convinced that the time is right to sell.

Countrywide said 38.5 per cent of its issued ordinary share capital will be in public hands following its admission to the market, assuming that a 10 per cent over-allotment option – whereby shareholders can sell extra stock if investor demand is high – was not exercised.

Goldman Sachs, Jefferies International and Credit Suisse were the bookrunners for the listing.

Countrywide’s estate agencies in Yorkshire include Bridgfords, Bairstow Eves and Blundells.

Bridgfords has been selling and renting properties since 1832 and has over 75 offices in the North.

Until recently, the Bridgfords brand was primarily focused on the North West, but it now covers the entire North region with offices in Yorkshire, Manchester, Cheshire, Derbyshire, Staffordshire, Lancashire, County Durham and Teesside.

Bairstow Eves has offices in North and South Yorkshire and first began trading in 1899.

Bairstow Eves was an amalgamation of two companies, Charles Eves & Son and Stanley J Bairstow.

IPO sector in good health

Earlier this month, Countrywide’s chief executive Grenville Turner said that the listing showed the IPO market was functioning normally again following the financial crisis.

He said he was encouraged by signs of improvement in the mortgage and housing markets.

“Sentiment is much stronger than it was five years ago and the availability of affordable mortgages is coming back,” he said at the time.

House price data has been mixed, but there is tentative evidence to suggest prices are steadying.