Foxtons has raised £22 million from investors and senior management after announcing that it needs the cash to cover all eventualities during the Coronavirus crisis including a ‘worst case scenario’.
The cash has been raised via the placing of nearly 54 million new shares in the company by its City investment adviser Numis Securities. This has raised £22 million at its current share price of 40p, a considerable discount of 7p on its traded share price.
This is a discount of 4.2%, offered in order to tempt investors to buy the shares during the current economic downturn prompted by the pandemic.
Foxtons will no doubt wish it had raised the cash at an earlier date – in February its share price was at nearly £1 a share, more than double its current level.
To bolster City confidence in the share issue further, many of the company’s key senior staff have bought significant tranches of the new shares.
These include CEO Nic Budden (150,000 shares), Non-exec chairman Ian Barlow (100,000), CFO Richard Harris (60,000), Non exec board members Sheena Mckay (30,000) and Rosie Shapland (20,000) and COO Patrick Franco (20,000).
Two of the largest Foxtons’ shareholders have also bought huge numbers of the placed shares.
Caledonia (Private) Investments PTY Ltd has spent £2.4 million buying 6.1 million shares, while Platinum Investment Management Ltd has spent £1.1 million buying 2.8 million.
Foxtons now has a market cap of £105 million, a quarter of the price paid for the company in 2007 when it was sold by founder Jon Hunt to BC Partners for £390 million.