uk estate agents foxtons taken over by banks

Foxtons is taken over by banks Friday 8th January 2010

Controversial agents Foxtons has been taken over by its lenders - an American bank and a Japanese bank. The development is part of an emergency refinancing and follows one of the private equity industry's most ill-timed deals - and the estate agency industry's best-timed one.

uk estate agents foxtons taken over by banks

Jon Hunt, who founded Foxtons, sold the business at the top of the property market to private equity firm BC Partners for £360m in May 2007 - shortly before the market crashed. BC has spent much of the last year attempting to renegotiate the massive loans it took out to fund its takeover deal, having admitted that it made a wrong judgement call. Bank of America and Mizuho have now struck a deal to reduce the debt from about £300m to £120m in return for them becoming the majority shareholders. Hunt has also written off a loan that he made to the firm, ending his association with the company he founded in 1981.

uk estate agents foxtons taken over by banks foxtons_taken_over_by_banks

Foxtons management led by chief executive Michael Brown will receive a minority stake of as much as 20% depending on whether performance targets are hit. BC will inject less than £50m of fresh equity, retaining its status as the biggest minority shareholder. Foxtons have greeted the deal as a "capital reorganization" which delivers "a sound balance sheet to complement Foxtons' strong trading performance and supports the company in continuing to build its position as London's leading estate agency". Brown said: "Despite the credit crunch and recession, the strength of Foxtons brand and business model, and the quality of our people, mean we have continued trading profitably. "Our strengths and future potential lie behind the capital reorganisation, and we are delighted we will continue to have the support of BC Partners and our banks going forward. We continue to face the future with considerable confidence." It is not thought that the development will affect Foxtons' appeal against the High Court ruling on renewal fees - see later story.