Exclusive: Crest Eyes Stock Market Return
One of the housebuilders which fell into quasi-state ownership during the 2008 banking crisis is plotting a quick-fire return to the London stock market, I have learned.
Crest Nicholson, which is owned by Varde Partners, a distressed investment fund, is being lined up for a flotation that could take place in the next few months. Expected to be valued at around £500m, the company would head straight into the FTSE 250, resuming its status as a public company following a five-year absence.
Varde's interest in floating Crest just a year after it took control of the business underlines the prospective impact of a string of Government measures aimed at stimulating the previously-moribund housebuilding sector. In recent weeks, a number of the country's most prominent housebuilders, including Barratt Developments, Galliford Try and Redrow have unveiled surging profits, restoring investors' faith in the industry.
Crest Nicholson became one of the symbols of the biggest banking crash of modern times, having been taken private at the peak of the debt-fuelled housing bubble..
Acquired by a joint venture between HBOS, then the country's biggest mortgage lender, and Sir Tom Hunter, the entrepreneur and philanthropist, for more than £1bn in 2007, it fell into financial difficulty amid the housing market slowdown.
Lloyds Banking Group, which rescued HBOS, offloaded its stake in Crest Nicholson last year, although the price paid by Varde was unclear, and questions are likely to be asked about whether the sale represented good value for the lender.
Last week, Peter Cummings, who led HBOS's swoop on UK housebuilders, acquiring stakes in a number of prominent companies, was fined and banned by the City watchdog, a verdict he disputed.
Investment banks including Barclays and HSBC have been asked to pitch for the mandate to float Crest Nicholson, people close to the company said today. A decision about whether to proceed with a listing is likely to be made after the company's financial year-end in November.
It is unclear at this stage whether Crest Nicholson, which has had its debts restructured by Varde, will raise substantial sums through an initial public offering, but people close to the company said a £500m valuation was likely to be "in the right ballpark".
Crest Nicholson builds principally in the south of England and sold more than 3,000 homes a year at the peak of the market. Its chief executive, Stephen Stone, is widely regarded as the architect of the company's turnaround, and is likely to make a substantial sum from a flotation.
Crest Nicholson declined to comment.