LONDON (Reuters) - Countrywide Holdings (CWD.L), Britain's largest estate agency by revenue, enjoyed a strong return to the stock market on Wednesday after a six-year absence, completing a listing which valued it at 750 million pounds.
Countrywide's successful share sale reflects a recent upturn in companies going public and was encouraged by growing investor optimism towards Britain's housing sector, with housebuilders reporting robust profits despite the mixed economic picture.
The company, whose 46 brands include Hamptons International and Bairstow Eves, raised 200 million pounds after pricing the offering at 350 pence, the top end of its initial range. It plans to pay down debt and expand the business.
The offer price valued Countrywide at around 15 times 2013 estimated earnings, a premium to its closest listed peer, LSL Property Services (LSL.L) which trades at around 12 times, one source close to the deal said.
The stock had risen 14 percent to 399.5 pence by 1548 GMT.
The source said many investors who had bought shares in the multiple-times oversubscribed offering, were now topping up their holdings in the market.
Countrywide's private equity owners Oaktree Capital (OAK.N), Apollo Global (APO.N) and Alchemy did not reduce their stakes through the offering and have agreed not to sell any shares for the next six months.
The 27-year-old firm had been listed between 1986 and 2007, before Apollo Global took it over for 1.1 billion pounds at the height of Britain's property market boom. It is now majority owned by Oaktree following a debt-for-equity swap in 2009.
"We are excited to be returning to the markets as a transformed business with a strong and diverse shareholder base," Chief Executive Grenville Turner said.
Countrywide, which sells one in every 11 homes in Britain, said last month 2012 earnings rose 12 percent to 63 million pounds before tax, depreciation and amortisation and excluding one-off items.
Recent buoyant conditions for housebuilders have been partly due to government schemes to encourage mortgage lending and an increase in the availability of cheap development land.
Countrywide's flotation also reflects strong European stock markets, which have recently lured a string of companies to go public, such as housebuilder Crest Nicholson (CRST.L) and insurer Direct Line (DLGD.L).
Around 40 percent of the shares sold in Countrywide's offering went to U.S. investors, with the rest to UK investors, the source close to the deal said, adding that many investors who put in orders received nothing as the demand was so strong.
Combined, the biggest 10 to 12 investors received between 40 and 50 percent of the shares sold, the source added.
Others planning flotations include Italian notebook maker Moleskine, and British home and motor insurer esure.
While new listings in London have in recent years been dominated by international companies, the initial public offerings of Crest and Countrywide could prompt more British firms to float as their private equity owners become convinced that the time is right to sell.
"The success of this deal may give prospective issuers greater confidence to test the markets," said the source. "There is a tremendous amount of demand for companies with attractive growth prospects."
Countrywide said 38.5 percent of its shares would be in public hands following the flotation, assuming a 10 percent over-allotment option - whereby shareholders can sell extra stock if investor demand is high - was not exercised.
Goldman Sachs (GS.N), Jefferies International and Credit Suisse CSGN.VX were the bookrunners for the listing.
Additional reporting by Kylie MacLellan, Editing by Stephen Nisbet