Foxtons Hires Banks To Prepare Market Debut

The buoyant state of London's housing market has persuaded the owners of Foxtons, the estate agency chain, to pursue a public flotation that could value it at more than £400m.

Sky News has learnt that BC Partners, the private equity group which took control of Foxtons for a second time last year, has in recent days appointed investment banks to oversee a listing of the company.

The banks that will work on a flotation, which could come within months, are Credit Suisse (NYSE: CS - news) , Canaccord Genuity, and Numis Securities, City sources said on Thursday.

The appointment of the three investment banks indicates that BC has decided to plump for a flotation rather than sale, although it remains possible that the buyout firm could also consider the latter route.

Foxtons rode the property boom under its founder, Jon Hunt, before selling to BC for £375m in 2007 - a deal which catapulted him into the ranks of Britain's super-rich.

The subsequent financial crisis and recession-hit UK economy, however, led to a sharp downturn in the property market, and left estate agents such as Foxtons unable to service their debts.

The company was taken over by its lenders before BC bought them out in 2012, a move which people close to the buyout firm said underlined its faith in Foxtons' business model.

A flotation of Foxtons could take place as soon as this autumn, months after rival Countrywide took advantage of buoyant equity markets to go public.

Like other estate agents, Foxtons may benefit from increased house-buying activity triggered by the launch of George Osborne's Help To Buy scheme, which will offer Government guarantees to homebuyers who are unable to afford large deposits.

The initiative, announced in the Budget in March, has attracted critical attention from MPs, who believe it has not been fully thought through and may lead to a renewed bubble in the housing market.

A report in Thursday's Financial Times said that Help to Buy may have been responsible for the sale of 4,000 new homes in the two months since it was introduced.

Foxtons' profits have surged during the last two years, buoyed by the booming London housing market, which has increasingly diverged from much of the rest of the country.

A BC spokesman declined to comment on the appointment of the banks to work on a listing of Foxtons.