Countryside suffers plunge as backer’s stake sale hits home

COUNTRYSIDE Properties suffered its worst day of trading in over a year after its private equity backer cashed in on the social housing developer riding on a wave of government funding.

American private equity giant Oaktree Capital made a cool £230m by slashing its stake in the developer, which regenerates housing estates with the help of government grants.

Oaktree has been selling down its stake since Countryside’s IPO in February last year and its valuation had climbed almost £600m since to £1.6bn until yesterday’s plunge shaved off £100m.

Its shares have soared just under 60pc in a year after building 28pc more properties as its private houses unit continues to benefit from low interest rates and the Help to Buy scheme.

The sale at 340p per share represents a 7pc discount on its closing price on Thursday and cuts Oaktree’s stake from 23pc to just 8pc.

The stake sale, which leaves star fund manager Neil Woodford the largest shareholder in Countryside with an 11pc interest, spooked investors to send the FTSE 250 firm’s shares sliding 26.5p, or 7.3pc, to 338p.

Elsewhere, struggling defence outsourcer Babcock International,

which was dumped out of the FTSE 100 on Wednesday, slipped a further 7p to 690p after analysts at Morgan Stanley told clients that the firm was a pricey pick even after its 27pc share price plunge just this year.

Analyst Andrew Farnell said that its first-half figures should have eased the

pressure on the firm caused by peer Ultra Electronics warning of a slowdown in the UK defence market but management did little to reassure investors.

He warned clients in a downgrade to “equalweight” that growth is unlikely to accelerate and the firm’s outlook is now shrouded in uncertainty.

Gold prices gaining 1pc lifted precious metals producers Randgold

Resources and Fresnillo

110p to £68.85 and 17p to £13.08, respectively, while medical equipment manufacturer Convatec shook off a “sell” rating from Deutsche Bank to jump 5.5p to 199.5p.

Stocks over in New York tanked after president Donald Trump’s ex-national security adviser, Michael Flynn, pleaded guilty to misleading the FBI in its probe into Russian interference in the US election with one report suggesting that he is also willing to testify against the president.

The net tightening around the president flipped sentiment in the US with the

S&P 500 and Dow Jones sinking as much as 1.6pc and 1.4pc, respectively, before paring some of their losses.

The news came late in the European session and stocks followed their counterparts across the pond into the red with the FTSE 100 reversing its small move higher to retreat 26.18 points to 7,300.49.

Us-exposed stocks continued to benefit from progress in Mr Trump’s plan to slash corporate tax but started to sink as the probe in Washington intensifies.

Rental firm Ashtead gained 5p to £19.04 and plumbing and heating products firm Ferguson nudged up 25p to £53.55.

On currency markets, the escalating investigation helped the pound to pare back its early losses against the dollar to hold above $1.35.