Countrywide Opens 10% Higher in Stock Market Return

Written by: Rachel McCormack
March 20, 2013

Shares in Countrywide Holdings (LON:CWD) opened 10 percent higher at 385p on March 20, its first day of trading after Britain’s largest estate agency by revenue priced its initial public offering (IPO) at the top end of its initial range, further bolstering hopes that the UK housing market is gaining momentum.

**Countrywide Prices IPO at 350p a Share**
On March 19, one day before its London stock market return, Countrywide priced its IPO at the top end of its initial price range amid strong demand and “positive response from investors”, Reuters reported. Shares in the estate agent were valued at 350p – the top of the narrowed 330p-350p scope. The bumper valuation secured ahead of the estate agent’ relisting put a price tag of about £750 million to its equity.

According to Countrywide, the IPO would raise £200 million. The company, which sells one in 11 of UK homes, plans to use the cash raised from the IPO to repay part of its £250 million debt and expand business. The estate agent revealed that its private equity owners – Oaktree Capital, Apollo Global (NYSE:APO) and Alchemy, will not be reducing their stakes in the firm and have agreed not to sell any shares for six months after the completion of the listing.

Countrywide’s Chief Executive Officer Grenville Turner said, as quoted by Reuters:“I am delighted by the very positive response we received from investors over the past few weeks which is recognition of the opportunity Countrywide has as the UK’s largest property services group.” He added that Countrywide “will continue to focus on delivering results, developing innovative and differentiated products and capitalising on our unique proposition”.

**Stock Market Return and Top Pricing Reflect Market Confidence**
Countrywide,whose brands include Hamptons International and Bairstow Eves, was previously listed on the London Stock Exchange (LSE) until private equity group Apollo Management bought it for £1.1 billion and took it private at the peak of the housing boom in 2007. A debt-for-equity swap with the Countrywide lenders in 2009 left US private equity group Oaktree Capital in control. After six years of private ownership,Countrywide announced last month its intention to return to the London stock market

(UK’s Countrywide Estate Agency Group Set for Stock Market Flotation).The flotation came against the backdrop of recent signs of buoyancy in the UK housing market and steadily rising equity prices since last summer as well as a run of successful IPOs that
have increased investor confidence in the new-issue market.
!m[British Estate Agency Group Prices IPO at Top End of Range, Valuing Equity at £750m](/uploads/story/1667/thumbs/pic_1_inline.jpg)
Market analyst Rightmove reported on March 18 that the average UK house price has jumped to £239,710 – a 1.7 percent increase from last month, and a peak not seen since spring 2008. The Countrywide IPO followed Crest Nicholson’s(LON:CRST) successful £600 million flotation in February. Shares in the recently-listed British homebuilder are up 25 percent since its IPO, contributing to the FTSE 100 index’s nine percent gain since the start of the year.
**After opening 10 percent higher the Countrywide stock kept rising. As of 09:26 GMT on March 20 the Countrywide share price was 391.250p, or 11.79 percent above the initial pricing of the company stock.**

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