BC Partners has lost its majority position in London estate agent Foxtons after more than a year of restructuring negotiations.
BC Partners will become a minority shareholder in Foxtons, but remains the largest individual shareholder ahead of the estate agent’s lenders Bank of America and Mizuho.
The private equity firm will retain “certain governance rights and minority protections” to ensure they have a say in strategic decisions, such as a sale of the business, a source close to the firm confirmed.
BC Partners acquired Foxtons for around £400 million (€445 million; $638 million) in June 2007, shortly before the sub-prime crisis slowed the UK property market to a near standstill.
According to a report in this morning’s Financial Times, BC Partners has agreed to inject less than £50 million of fresh equity into the business to remain its largest minority shareholder. Bank of America and Mizuho, the lenders behind the initial buyout, will collectively own a majority of the estate agent’s equity.
“With the market stabilising and with Foxtons' potential to take market share … this was a compelling investment,” Andrew Newington, partner at BC Partners, told the UK daily.
Foxtons’ management, led by chief executive Michael Brown, will receive a stake of 20 in the business if certain targets are met, according to the report.
In a statement released last week, Brown said: “We continue to face the future with considerable confidence.”