Zoopla shares rise on IPO

Zoopla, the online property website, has brushed off float fatigue and priced its IPO at 220p per share, just below the middle of its 200p-250p share price range. The pricing gives the company a valuation of around £919 million.

However, this is less than the £1 billion originally mooted and shows the group is keen to get the issue away smoothly.

Conditional trading in the company's shares started on Wednesday and they rose by over 4% to 231.95p within the first half hour of trading.

The IPO puts Daily Mail and General Trust (DMGT), owner of the Daily Mail newspaper group, in line for a £177 million windfall. The media group is selling 19% of its holding and will retain a 33.7% stake in the property search site.

The site's majority backer will welcome the cash injection, as its flagship newspaper faces escalating competition from free papers, although its online presence is holding up well and has not yet been forced to charge for its content.

Countrywide said it had sold a 2.2% stake worth £20 million but retains a 4.1% stake, while investors have access to a freefloat of 38.3%.

Zoopla, Britain's second biggest housing site behind Rightmove, was founded in 2007, and generates the majority of its revenue by charging approximately 19,000 member estate agents monthly subscriptions to advertise properties on their books.

The company claims to have more than 40 million visits a month to its websites and mobile applications.

Britain's second biggest housing site has a unique selling point over its rivals by enabling house hunters to search the properties on its books by how long they have been on the market and by how much they have dropped their asking prices, plus other features related to local amenities.

At this pricing, Zoopla is trading at a lower earnings multiple than RIghtmove.

Alex Chesterman, the founder and chief executive of Zoopla and the founder of LoveFilm, said: "Today's announcement marks an important milestone for our business following a number of years of strong growth."

He said the IPO had received "a significant level of institutional investor support" and the backing of members.