Date Published 16 August 2013
Shares in the UK’s largest estate agent Countrywide wobbled this week after two of its major backers, Oaktree and Apollo, both sold more than a quarter of their stakes more than a month ahead of schedule.
When Countrywide returned to the stock market in March, both Oaktree and Apollo entered a lock-up agreement that they would not sell any shares for six months, until September 20.
However, this week the two private equity firms sold shares collectively worth some £210m, after shares in Countrywide shot up 60% since flotation and investors were hungry for more.
Oaktree sold 25% of its stake, reducing its holding from 36.88% of the company to 27.59%, while Apollo cut back its stake by 38% from 17.53% down to 10.87%. Both have agreed to sell no more shares for the next 90 days.
Sanjay Patel, a non-executive director at Countrywide appointed by Apollo, has stepped down from Countrywide’s board. ? ?Countrywide’s third major private equity backer, Alchemy, which holds a 6% stake, has agreed to remain bound by the original IPO lock-up.
Together, the three backers had owned 95% of Countrywide pre-float, and then 60% afterwards. As from now, they together hold a stake of 44%.
While Oaktree and Apollo had pledged in Countrywide’s float prospectus to retain their holdings, a clause said that this could change in `exceptional circumstances`.
Those exceptional circumstances appear to have been triggered by the upturn in the property market, with investors complaining that not enough shares in Countrywide were available for trading.
As a result, Oaktree and Apollo agreed to sell some of their stake a month earlier than they were entitled.
Countrywide’s shares tumbled on news of the sales, and ended yesterday at 550p compared with a high of 618p. In March, Countrywide shares launched at 350p but immediately went to a premium.
Meanwhile, Foxtons is likely to float on the stock market earlier than expected, and could announce details next week. Its float, now thought to be as soon as August 27, could raise £400-£500m.
Foxton’s majority owner is private equity firm BC Partners, which bought the firm at the height of the market, in 2007. Following the crash, BC was forced to hand control of Foxtons to its banks in 2010, but took back majority ownership last year.