Ir­ish house­builder IPO tar­get rises to more than €450m

Oak­tree-backed Glen­veagh Prop­er­ties to float in Dublin and Lon­don in Oc­to­ber Re­vised tar­geted size of IPO would top the €440m raised by Cairn Homes in 2015

The Irish Times - Business - - BUSINESS NEWS - JOE BREN­NAN

Glen­veagh Prop­er­ties, the new Ir­ish home­builder backed by US pri­vate eq­uity firm Oak­tree that is be­ing pre­pared for flota­tion, is now poised to raise at least €450 mil­lion af­ter its ex­ec­u­tives re­ceived pos­i­tive feed­back from po­ten­tial in­vestors, ac­cord­ing to sources.

The com­pany, which will com­bine de­vel­op­ment land ac­quired by Oak­tree in re­cent years with the as­sets of Maynooth-based builder Bridgedale, is ex­pected to float next month both on the Ir­ish and Lon­don stock ex­changes. It had pre­vi­ously tar­geted rais­ing €350 mil­lion through the ini­tial pub­lic of­fer­ing (IPO).

It is un­der­stood that Justin Bickle, a man­ag­ing di­rec­tor at Oak­tree’s Euro­pean op­er­a­tion who has led the group’s real-es­tate and loan ac­qui­si­tions drive in Ire­land fol­low­ing the fi­nan­cial cri­sis, will leave the Los An­ge­les-based firm to be­come Glen­veagh’s chief ex­ec­u­tive, the sources said.

Shares

The Ir­ish Times had pre­vi­ously re­ported that Mr Bickle, Bridgedale chief ex­ec­u­tive Stephen Gar­vey and for­mer Na­tional As­set Man­age­ment Agency ex­ec­u­tive John Mulc­ahy, who is be­ing lined up to chair Glen­veagh, have been awarded 200 mil­lion founder shares in the com­pany un­der an in­cen­tive scheme that would see the se­cu­ri­ties con­vert into or­di­nary stock, sub­ject to cer­tain per­for­mance tar­gets be­ing met. That equates to about 14.3 per cent of the com­pany’s cur­rent au­tho­rised share cap­i­tal.

The re­vised tar­geted size of the IPO would top the €440 mil­lion raised by Cairn Homes when it floated in June 2015, be­com­ing the first Ir­ish home­builder to turn to de­but on the stock mar­ket in al­most two decades.

It comes at a time when Ir­ish house price in­fla­tion is run­ning at more than 12 per cent as the in­dus­try strug­gles to meet resur­gent de­mand fol­low­ing the cri­sis. Mr Mulc­ahy will take on the role of ex­ec­u­tive chair­man at Glen­veagh, while Mr Gar­vey will be­come chief op­er­at­ing of­fi­cer of the com­pany as it floats.

Mar­ket sources said in July that the new com­pany will con­tain as much as €100 mil­lion of as­sets ini­tially rolled in by Oak­tree and Bridgedale as well as fur­ther land pur­chase agreed in re­cent months, con­di­tional on the IPO be­ing ex­e­cuted. Oak­tree is ex­pected to have a stake of be­low 20 per cent at the time of the flota­tion.

Bridgedale was an un­der­bid­der for 8.64 acres of prime de­vel­op­ment land sold by State broad­caster RTÉ in Don­ny­brook in Dublin 4 to Cairn Homes in July for €107.5 mil­lion, some 43 per cent above the guide price.

Op­tions

It was re­ported ear­lier this month that Bridgedale has taken op­tions to buy up to €80 mil­lion of de­vel­op­ment land, much of it based in Co Wick­low, from US pri­vate eq­uity gi­ant Cerberus, as well as a plot at Ci­ty­west in south­west Dublin which is cur­rently un­der the con­trol of Gold­man Sachs.

Mean­while, Glen­veagh, which was reg­is­tered with the Com­pa­nies Reg­is­tra­tion Of­fice last month as a lim­ited com­pany, has filed in the last week to turn it­self into a pub­lic lim­ited com­pany.

Glen­veagh has hired Dublin pub­lic re­la­tions agency Gor­don MRM, which re­cently worked with the Depart­ment of Fi­nance on the State’s €3.4 bil­lion IPO of a 28.8 per cent stake in AIB, to man­age its me­dia re­la­tions. A spokesman with the agency de­clined to com­ment on de­tails sur­round­ing Glen­veagh’s flota­tion.

A spokes­woman for Oak­tree also de­clined to com­ment on the deal.

For­mer Nama ex­ec­u­tive John Mulc­ahy, who is be­ing lined up to chair Glen­veagh, have been awarded 200 mil­lion founder shares in the com­pany un­der an in­cen­tive scheme

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