Glenveagh Properties secures demand to cover €550m IPO

Glenveagh Properties, a new Irish housebuilder backed by US private equity firm Oaktree Capital, secured enough orders to cover its €550 million initial public offering within 12 hours of the deal being launched on Monday, according to market sources.

The company, created by combining property accumulated by Oaktree in Ireland following the property crash with the assets of Maynooth-based builder Bridgedale, is offering the shares at €1 each before they are set to float on the Dublin and London stock exchanges on October 10th.

Credit Suisse and Davy in Dublin are managing the transaction.

Glenveagh said on Monday that it has about 1,700 “shovel ready” units and plans to be building at least 1,000 homes by 2020.

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It will be led by executive chairman John Mulcahy, who previously worked with the National Asset Management Agency, chief executive Justin Bickle, who will step down as an Oaktree executive after the IPO, and chief operating officer Stephen Garvey, currently head of Bridgedale.

The flotation of Glenveagh comes a little over two years after Cairn Homes raised €440 million in the first IPO of an Irish housebuilder since the late 1990s. It comes at a time when house prices are rising at an annual rate of about 12 per cent as supply continues to fall well short of demand in a recovering economy.

The founder shareholders of both Cairn and Glenveagh have been awarded lucrative incentive plans. Cairn’s founders are entitled to 20 per cent of total shareholder returns over a seven-year period, subject to the company hitting a minimum annual 12.5 per cent return. Glenveagh has a similar plan, which runs for five years.

The rewards are constructed by way of founder shares, which can be converted into ordinary stock, subject to the return hurdles being passed.