Foxtons float to value estate agent at £649m

Estate agent Foxtons increased its value by more than £100 million in just a few hours today after making a “stunning” debut on the London stock market.

The group was initially valued at £649m, but this soon rose by more than a fifth as investors vied to take a slice and capitalise on Britain’s resurgent property market.

Foxtons announced shares would initially be priced at 230p each – at the top end of estimates – but within hours the stock had jumped to 280p, making the market value of the company more than £790m.

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The shares cooled slightly in the afternoon to close 37p, or 16 per cent, above the offer price, at 267p.

The listing was the second major estate agency float of the year after Countrywide rejoined the stock market valued at more than £800m in March.

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Joe Rundle, head of trading at ETX Capital, said the Foxtons listing was a “stunning debut” amid high demand from investors bullish about the strength of the UK housing recovery, with low interest rates and government initiatives to boost the market.

Michael Brown, chief executive of Foxtons, said: “We are delighted that our initial public offering has been successfully received and there has been strong interest from investors.

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“We welcome our new shareholders and we are looking forward to the next stage in the development of the business as a listed company.”

The Foxtons float comes amid surging house prices in London, which have risen nearly 10 per cent in the past year, according to official figures released this week.

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Private equity owner BC Partners is selling some of its stake in Foxtons, which operates from about 40 offices in and around London, while the estate agent itself is expected to raise about £390m.