BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook
LONDON – Zoopla Property Group, a British real estate listings website, was valued at more than $1.5 billion in its initial public offering in London on Wednesday.
The company priced its offering at 2.20 pounds a share — just below the midpoint of its initial price range of £2 to £2.50 a share — giving it a market capitalization of £918.8 million, or about $1.56 billion.
The offering came amid increasing worries about Britain’s red-hot housing market. The country’s top financial officials have warned recently of the need for new lending rules to curb the risks the frothy market poses to economic growth and falling unemployment.
Bruce Dear, head of London real estate at the law firm Eversheds, said the Zoopla I.P.O. “has been caught marginally offside by the Bank of England flagging that the housing market must be dampened. This explains their sensible ‘lower half’ pricing.
“How Zoopla must wish it had made its I.P.O. run three months ago,” Mr. Dear said.
Zoopla’s shares rose more than 5 percent in early trading on Wednesday.
Started in 2008, the website attracts more than 20 million visits a month. About 19,000 real estate agents in Britain pay a monthly subscription fee to advertise their listings on the site, generating the vast majority of Zoopla’s revenue.
In announcing its I.P.O. last month, Zoopla said it had strong market penetration levels, representing about 90 percent of residential listings from property professionals in Britain.
“Today’s announcement marks an important milestone for our business following a number of years of strong growth and having built a market-leading proposition,” Alex Chesterman, Zoopla’s founder and chief executive, said at the time.
If an over-allotment of shares is fully exercised, Zoopla expects to realize proceeds of £369.9 million, or about $627.6 million. The public float, excluding any over-allotment, represented 38.3 percent of Zoopla’s share capital.
Daily Mail and General Trust, which is the publisher of The Daily Mail newspaper and its popular website, reduced its holdings in Zoopla through the offering, retaining a 33.7 percent stake before the exercise of the additional share allotment.
The full article can be found at NYT DealBook.