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Crest Nicholson to return to the market

Crest Nicholson has a short term land bank of which over 95% is focused on the South of England, with an estimated gross development value of circa £3.9bn, as at 31 October 2012.

Crest Nicholson, the house builder which went private just before the credit crunch, is planning a return to the stock market.

The company is looking to raise around £50mln through its stock market flotation.

A number of existing shareholders will also look to reduce their holdings by selling their shares as part of the stock market flotation; among those cashing in are Värde Investment Partners and Deutsche Bank, plus certain directors, senior managers and employers of Crest Nicholson.

Following the share offer, the free float – the proportion of shares not held by committed long term holders - is expected to be at least 35% of the issues share capital of Crest Nicholson.

The group’s shares were previously listed on the London stock exchange between 1969 and 2007, but was taken private by a joint venture between the Halifax Bank of Scotland and West Coast Capital.

At that time, the takeover valued the company at £715mln, some 2.4 times the net asset value of the company at 31 October 2006.

In the fashion of private equity firms, the buyers loaded the company up with debt, but the timing was poor as the housing market went into a slump as mortgage lenders faced a liquidity shortage.

Since 2007 gearing has been reduced by two restructurings, including a debt-for-equity swap, and Stephen Stone, chief executive of Crest Nicholson claimed the south of England focused operator now has a “robust balance sheet”.

“The housing market is entering a period of gradual recovery and with our emphasis on the South of England, including London, and the continued support for the new homes market from government, we are well positioned to generate value for shareholders," Stone claimed.

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