Zoopla Property Group, the well-known property listings website has been valued at just under £1 billion as it went public recently. Zoopla priced its shares at £2.20 for its initial public offering which is a touch under the midpoint of its initial price range of £2 – £2.50. These figures reflect the company’s value which is said to now have a market capitalisation of £918.8 million.
The IPO was made during a time of uncertainty regarding the UK’s red-hot housing market. Leading financial individuals have repeatedly sent out warning messages that there needs to be a change in the lending rules so as to manage the risk which is currently posed to the slow economic growth and unemployment figures.
The head of London law firm Eversheds, Bruce Dear, which specialises in real estate said that this offering by Zoopla has been partially caught office by the county’s central bank which said that the housing market must be cooled down. He stated that the comments by the Bank of England explain Zoopla’s “sensible” lower half pricing choice. Mr Dear is of the opinion that a better timing to go public would have been three months earlier when the housing market wasn’t under such scrutiny.
Zoopla was formed in 2008 and the online giant now attracts over 20m visitors per month making it a terrific success story. It is estimated that 19,000 real estate agents across the country pay a subscription fee every month which allows them to have access to the 20m visitors and advertise their properties. The vast majority of the website’s income comes from the subscription fees.
In a statement made last month when announcing its plan of an IPO the property website stated that it had “strong market penetration levels” which represent around 90% of residential listings in Britain made by property experts.
Zoopla are expected to generate around £369.9m if an over-allotment of shares is fully exercised with the public float on its own representing around 38.3% of the company’s share capital. General Trust and Daily Mail made a reduction in its share hold9ings in Zoopla by way of the IPO, now only retaining a 33.7% stake as opposed to its previous holding of 52.6% prior to the offering. However, Zoopla is only one of many companies which have recently announced plans to list on the London stock exchange this year. Shelf Drilling, Morta-Engil Africa and SSP Group are amongst many companies which are rushing to raise capital by way of an IPO.