Foxton's may turn out to be a bright spot for BC Partners after all; the private equity firm is planning to float the estate agent business reportedly as soon as this autumn.
It is understood that Credit Suisse, Numis Securities and Canaccord Genuity have been selected to run the IPO.
BC Partners declined to comment.
Foxtons: Revving up
First reported by Sky News, the IPO could value the business at more than £400 million, with the Financial Times estimating that would double BC's money.
BC Partners bought Foxtons for £375 million in 2007 using its €5.8 billion BC European Capital VIII, a 2005 vintage.
Bought just weeks before the credit crunch started in 2007, BCP modelled the deal on the assumption that UK property sales could not fall by more than 30 percent. Such a decline would have been equivalent to the lowest level seen in 30 years.
“Obviously, we made the wrong call on the market,” Andrew Newington, the managing partner who has subsequently left the firm, said during a rare press conference called back in 2009. He told reporters that London market volumes in fact fell between 60 percent and 70 percent in a collapse whose steepness and suddenness was impossible to anticipate.
“It’s not been a good story for us,” co-chairman Raymond Svider acknowledged at the time, stressing that the equity investment in Foxtons represented only 1 percent of Fund VIII and was mitigated partially by a contingent vendor loan linked to performance. And, despite defaulting on its covenants in 2008, Foxtons remained profitable and continued to gain market share in an extraordinarily difficult housing market, Newington added.
The business was restructured in 2010, with BC Partners injecting fresh equity but losing its majority stake, which it regained in 2012 when it repurchased the equity stakes of the lenders.