Thursday 29 September 2016

€400m Cairn Homes IPO set for over-subscription today

Peter Flanagan Commercial Property Editor

Published 10/06/2015 | 02:30

John Reynolds
John Reynolds

Irish home builder Cairn Homes is on track to raise close to €400m when it lists on the London Stock Exchange today.

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It will become the first Irish construction firm to be publicly listed since McInerney Holdings when it shares start trading this morning.

The offering, which was announced last week, is thought to have been well received by investors. City sources have indicated that the share offering was two times oversubscribed.

Cairn's decision to go down the IPO route marks a shift in how construction firms finance themselves. The sector traditionally relied on bank loans to finance construction but Cairn will rely on equity financing, with the banks unwilling to provide significant debt since the property crash.

Cairn Homes was set up last year and is chaired by former KBC Bank Ireland boss John Reynolds.

The company was set up by chief executive Michael Stanley and Alan McIntosh. Mr Stanley is a former chief executive of Stanley Holdings, while serial investor Mr McIntosh was involved in Punch Taverns and other companies.

When the IPO plans were made public, Cairn Homes chairman John Reynolds said the firm would be capitalising on an improving Irish economy.

"The Irish economic backdrop continues to improve underlined by the fact that Ireland has the joint highest GDP growth forecast in the European Union.

"These strong macro- economic conditions, together with a population that is forecast to increase to five million by 2031, will underpin a strong demand for homes over the coming years.

"We believe that this is a unique opportunity for our company, our customers, potential investors and the sector," he said.

Mr Stanley added that fundraising was only part of the reason for Cairn to go down the IPO route as opposed to other forms of financing.

Credit Suisse and Goodbody Stockbrokers are advising on the deal.

Irish Independent

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