Bosses at Foxtons set to pocket £100m fortune as pushy estate agent plans for SECOND stock market flotation in six years

  • Known for 1,000 branded Mini Coopers and aggressive sales tactics
  • Founder Jon Hunt sold business for £360m in 2007 at top of market
  • Foxtons is likely to come to market with value from £400m to £500m

By Rupert Steiner for the Daily Mail and Mark Duell

Published: 11:26 EST, 26 August 2013 | Updated: 01:45 EST, 27 August 2013


Bosses at Foxtons are expected to make around £100million after announcing plans to float the company on the stock exchange yesterday.

It is the second time in six years that the estate agency, famous for its aggressive sales tactics, has given its top team a cash bonanza.

In 2007 founder Jon Hunt sold Foxtons for £360million at the top of the market to private equity firm BC Partners.

Pushy estate agent: Foxtons is likely to come to market with a value of between £400million to £500million and has appointed three investment banks to float the business

Pushy estate agent: Foxtons is likely to come to market with a value of between £400million to £500million and has appointed three investment banks to float the business

Back then the business was saddled with £260million worth of debt that it found itself unable to pay back.

When the bottom fell out of the housing market at the height of the downturn its banks – Bank of America and Mizuho – stepped in and took control of the firm.

Well-known sight: Foxtons is famous for its fleet of 1,000 branded Mini Coopers and aggressive sales tactics

Well-known sight: Foxtons is famous for its fleet of 1,000 branded Mini Coopers and aggressive sales tactics

The private equity bosses, who had been made to look foolish by the poor timing of their investment, were said to have internally referred to the business as the ‘F-word’.

Property mogul: In 2007 founder Jon Hunt sold the business for £360million at the top of the market

Property mogul: In 2007 founder Jon Hunt sold the business for £360million at the top of the market

However BC Partners, which also controls mobile retailer Phones 4u, managed to retain a stake in Foxtons after investing a further £50million.

It then decided to buy the business back from the banks last year after the company’s performance improved on the back of the recovery in the housing market.

This time the chain is likely to come to the stock market with a value of between £400million to £500million.

And the management team, led by chief executive Michael Brown, will share around £100million for the 20 per cent stake they have accumulated.

After a shaky start Foxtons, which has 40 offices in London and two in Surrey, has been starting to show signs of a better performance in recent months.

Much of the boost in trading is due to the strong property market in London and Government schemes to kick-start house purchases – such as Funding for Lending and the first phase of Help to Buy.

But over the years the aggressive tactics used by the firm’s estate agents have come in for criticism.

A 2003 report by the Office of Fair Trading heaped criticism on Foxtons for its underhand tactics.

For real? A report heaped criticism on Foxtons for removing For Sale signs of rival firms outside houses. Its staff replaced them with Foxtons signs even though they did not represent the house (file picture)

For real? A report heaped criticism on Foxtons for removing For Sale signs of rival firms outside houses. Its staff replaced them with Foxtons signs even though they did not represent the house (file picture)

QUESTIONABLE FOXTONS TACTICS

Foxtons has come under fire for some of its practices over the past decade.

The Office of Fair Trading won a case against the company in July 2009, when a judge agreed that its terms - which forced landlords to continue paying commission even if the agent was no longer involved in letting or managing a property - were a ‘trap’.

The OFT later said in July 2011 that it had saved people who rented out flats and homes through Foxtons at least £4.4million after forcing the estate agent to change its terms.

And in June 2003 the estate agent admitted it had ordered workers to take down For Sale boards belonging to rivals ‘for a limited period in 2001’, including those placed legitimately.

These included removing For Sale signs of any rival firms outside houses and getting staff to replace them with Foxtons signs – even though the house was not represented by the estate agent.

Mr Hunt, who founded the company in a former pasta restaurant in London’s Notting Hill, is no longer connected to the business.

Since leaving the firm he has managed to almost triple the cash he received for the sale by investing in property – leaving him with an estimated fortune of £925million.

The multi-millionaire has spent some of the money on his mansion in Kensington Palace Gardens, which has an underground museum specially designed to house his collection of vintage Ferraris.

A spokesman for Foxtons refused to comment on the flotation.