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Crest Nicholson Declines After IPO Returns Builder to Market

Feb. 18 (Bloomberg) -- Crest Nicholson Holdings Plc, the U.K. homebuilder taken over by lenders during the financial crisis, fell on the first day of trading in London after the company’s 225 million-pound ($348 million) IPO.

The shares declined 1.4 percent to 261.25 pence at the close of trading, giving the company a market value of 657 million pounds. The stock gained 20 percent from the 220 pence IPO price in three days of conditional trading last week. Barclays Plc and HSBC Holdings Plc are among the banks that managed the share sale, the company said on Feb. 13.

The Bloomberg EMEA Homebuilders Index, composed of the U.K.’s seven biggest publicly traded homebuilders, gained 70 percent last year as higher selling prices and improved margins helped overcome the country’s stuttering economy and a lack of mortgage lending. While Britain is facing the prospect of a triple-dip recession this year, hurting efforts by potential homebuyers to save for a deposit, the index has increased by about 7 percent this year.

Banks including Lloyds Banking Group Plc swapped debt for a 90 percent stake in Crest Nicholson after British home sales dropped the most in at least 30 years in 2009. Crest Nicholson has been focusing on volume growth by acquiring large sites while other homebuilders concentrate on widening their margins.

European companies have raised $3.3 billion in initial public offerings this year, after volumes of the sales fell in 2012 to about a third of what companies sold in 2011, according to data compiled by Bloomberg. LEG Immobilien AG, a German apartment landlord, raised about 1.3 billion euros ($1.7 billion) in an IPO in January, becoming the country’s largest publicly traded property company by market value.

To contact the reporters on this story: Christopher Spillane in London at cspillane3@bloomberg.net; Ruth David in London at rdavid9@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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