UK’s Countrywide Estate Agency Group Set for Stock Market Flotation
**Countrywide IPO Lined Up for This Year**
The Financial Times reported on 18 January 2013 that Britain’s largest estate agency group, Countrywide, is being lined up for a stock market flotation by its US private equity owner, Oaktree Capital Group LLC (NYSE:OAK). In what appears to be a vote of confidence in the recovery of the UK housing market, the buyout group has started discussions with banks, including Goldman Sachs (NYSE:GS), about launching an initial public offering for the estate agency which operates 46 High Street brands, sells one in 11 of all UK homes and arranged £4 billion worth of mortgages in 2011.
It is unclear how much of the business would be listed if the IPO goes ahead. The FT reported that Countrywide, Oaktree and Goldman Sachs have so far declined to comment on the flotation process. Yet according to the paper, the Countrywide IPO, which if it transpires will be one of the most significant listings in the UK’s real estate sector since the 2008 property market collapse, is likely to happen this year.
**Back to Stock Market**
Countrywide, which operates brands including Hamptons International, Churchills and Bairstow Eves, was previously listed on the London Stock Exchange (LSE) until private equity group Apollo Management (NYSE:APO) bought it for £1.1 billion and took it private at the height of the housing boom in 2007. The debt-laden company was then hit hard by the credit crisis and the housing market slowdown that followed.
In 2009, Oaktree acquired Countrywide in a deal that saw the realtor write down 75 per cent of its loans and receive £110 million of fresh capital. Since taking over the business, Oaktree has overseen a wide-scale restructuring of Countrywide’s operations, including changes in the senior management team. Currently, Apollo continues to hold a 25 per cent share in estate agency group, while Alchemy’s Special Opportunities Fund has a stake of almost 10 per cent.
!m[Major Property Sector Listing in Prospect as Oaktree Mulls Countrywide IPO](/uploads/story/1260/thumbs/pic1_inline.png)
**German Residential Property Group Also Planning IPO**
As reported by Reuters on 20 January 2013, a German property company owned by the Goldman Sachs investment fund Whitehall is also planning an initial public offering — one of the biggest in the European real estate sector in recent years. The IPO of LEG Immobilien, which specialises in residential property, is expected to raise up to €1 billion (£839 million). People familiar with the matter told Reuters that the listing of LEG, which owns 91,000 residential apartments, is likely to happen in February, since notice of an intention to float is usually issued four weeks ahead of an offering. One source told the news agency that a stake of up to 50 per cent will be listed on the stock exchange, while another said that about a third of LEG’s shares will be placed. It is also understood that, given anticipated strong investor demand, the IPO discount common for new issues will be a low single-digit percentage.
Goldman Sachs has been an active investor in European real estate in the last several years. In late 2012, the bank’s Whitehall investment fund sold a portfolio of five European hotels to a joint venture for €440 million (£368.8 million). A year earlier, Goldman and the private equity firm Cerberus Capital Management raised some €470 million (£393.9 million) through the flotation of German property company GSW Immobilien (FRA:GIB).
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