Crest Nicholson flotation gets a firm following

David Hellier
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FINANCIAL advisers for the housebuilder Crest Nicholson have managed to attract sufficient demand for the upcoming IPO a week ahead of schedule.

The demand for the offer has been achieved despite the nervousness in the financial markets on Monday and despite the paucity of new issues in the London markets over the past couple of years.

Sources close to the deal, which is the first major IPO of the year in London, said yesterday that the book was fully covered at the bottom end of the 195p-230p price range.

With a week to go before pricing is finalised, the group’s advisers from Barclays, Lazard, HSBC and Numis, hope to nudge the price towards the middle of the range.

The housebuilder, which was taken private by Scottish entrepreneur Tom Hunter and HBoS in 2007, will have a market capitalisation of between £487m to 578m after the listing, which will include the sale of new and existing shares.

Crest hopes to raise £56m selling new stock, while existing shareholders, including Deutsche Bank and Varde Partners, will sell as much as £175m worth of shares. Deutsche and Varde will make a healthy profit on their investment.

Last month, the 50-year-old firm said it would return to the stock market to position itself for a housebuilding sector recovery five years after being taken over during a housing market crash.

The group and its chief executive Stephen Stone have been holding back-to-back institutional meetings in the UK and US in the past few days and their diaries are jammed full until the closing date next Tuesday.

The issue is being watched by other IPO contenders.