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Foxtons bosses in line to make £100m as estate agent prepares flotation Foxtons bosses in line to make £100m as estate agent prepares flotation
(25 days later)
Foxtons bosses are in line for a £100m windfall as the notoriously aggressive estate agent prepares to float on the stock market.Foxtons bosses are in line for a £100m windfall as the notoriously aggressive estate agent prepares to float on the stock market.
The chain, famous for its pushy salespeople and eyecatching fleet of almost 1,000 decorated Mini Coopers, is expected to announce its intention to float in a listing valuing the company at £400m-500m on Tuesday.The chain, famous for its pushy salespeople and eyecatching fleet of almost 1,000 decorated Mini Coopers, is expected to announce its intention to float in a listing valuing the company at £400m-500m on Tuesday.
Bosses could collect up to £100m from the near-20% stake they hold in the company. The chief executive, Michael Brown, a former Slaughter and May lawyer who collects pay and benefits of £1.3m a year from Foxtons, will be the largest single beneficiary after increasing his stake by beating a string of performance targets.Bosses could collect up to £100m from the near-20% stake they hold in the company. The chief executive, Michael Brown, a former Slaughter and May lawyer who collects pay and benefits of £1.3m a year from Foxtons, will be the largest single beneficiary after increasing his stake by beating a string of performance targets.
It will be the second time Foxtons has made its bosses millionaires. Jon Hunt, who founded the chain in a former pasta bar in Notting Hill in 1981, sold the business to the private equity firm BC Partners for £360m in May 2007 just months before the credit crunch sent property prices into freefall. Hunt is now worth £925m, according to the Sunday Times Rich List, and owns a mansion on Kensington Palace Gardens, known as "Billionaires' Row", complete with a car museum for his collection of vintage Ferraris.It will be the second time Foxtons has made its bosses millionaires. Jon Hunt, who founded the chain in a former pasta bar in Notting Hill in 1981, sold the business to the private equity firm BC Partners for £360m in May 2007 just months before the credit crunch sent property prices into freefall. Hunt is now worth £925m, according to the Sunday Times Rich List, and owns a mansion on Kensington Palace Gardens, known as "Billionaires' Row", complete with a car museum for his collection of vintage Ferraris.
Securing a successful flotation would be a remarkable achievement for BC Partners, which saw Foxtons taken over by its bankers when it failed to repay debts.Securing a successful flotation would be a remarkable achievement for BC Partners, which saw Foxtons taken over by its bankers when it failed to repay debts.
BC has since admitted that the ill-timed debt-fuelled buyout was a mistake and its partners are said to have referred to the estate agency as the "F-word". But BC persevered and regained control of the company for the second time last year, when it bought the remaining Foxton stakes from the banks.BC has since admitted that the ill-timed debt-fuelled buyout was a mistake and its partners are said to have referred to the estate agency as the "F-word". But BC persevered and regained control of the company for the second time last year, when it bought the remaining Foxton stakes from the banks.
Foxtons, which has more than 40 London offices, is known for its ruthless approach instilled by Hunt, who said: "Our clients want us to go to war for them".Foxtons, which has more than 40 London offices, is known for its ruthless approach instilled by Hunt, who said: "Our clients want us to go to war for them".
In recent months, the company is said to have started to offer to sell homes without taking a fee to boost its books before the flotation. The tactic has been branded "suicide bidding" by other agents.In recent months, the company is said to have started to offer to sell homes without taking a fee to boost its books before the flotation. The tactic has been branded "suicide bidding" by other agents.
The firm is well-known for controversial tactics and was criticised by the Office of Fair Trading in 2003 for removing rival agents' "for sale" boards and putting up its own in front of houses it had no mandate to sell.The firm is well-known for controversial tactics and was criticised by the Office of Fair Trading in 2003 for removing rival agents' "for sale" boards and putting up its own in front of houses it had no mandate to sell.
Foxtons has been lifted by the recovery in the London housing market over the past three years, doubling its pre-tax profits in 2010 to £35.4m, which dipped slightly to £32m in 2012, according to filings at Companies House.Foxtons has been lifted by the recovery in the London housing market over the past three years, doubling its pre-tax profits in 2010 to £35.4m, which dipped slightly to £32m in 2012, according to filings at Companies House.
New house price figures from the upmarket estate agent Knight Frank show that prime central London property prices have risen by 4.8% this year. Prices in Marylebone and Notting Hill rose by 1.5% and 1% in August alone.New house price figures from the upmarket estate agent Knight Frank show that prime central London property prices have risen by 4.8% this year. Prices in Marylebone and Notting Hill rose by 1.5% and 1% in August alone.
BC and Foxtons declined to comment. BC has appointed Credit Suisse, Numis Securities and Canaccord Genuity to advise it on the flotation.BC and Foxtons declined to comment. BC has appointed Credit Suisse, Numis Securities and Canaccord Genuity to advise it on the flotation.
Rival estate agent Countrywide went public in March, valuing the owner of Bairstow Eves, Gascoigne-Pees and Hamptons International at £750m.Rival estate agent Countrywide went public in March, valuing the owner of Bairstow Eves, Gascoigne-Pees and Hamptons International at £750m.
In February, the housebuilder Crest Nicholson floated with a value of £550m. It was followed in March by the insurer esure, which listed with a value of £1.2bn and made its founder Peter Wood nearly £200m.In February, the housebuilder Crest Nicholson floated with a value of £550m. It was followed in March by the insurer esure, which listed with a value of £1.2bn and made its founder Peter Wood nearly £200m.
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