UPDATE 1-UK builder Countryside plans return to London stock market

(Adds industry source on valuation, details, background)

By Esha Vaish

Jan 14 (Reuters) - British property developer CountrysideProperties Plc plans to raise about 114 million pounds ($164million) through an initial public offering, returning to theLondon stock market after more than a decade in private hands.

The IPO is likely to value Countryside at about 1 billionpounds, said an industry source, who asked not to be identified.

Brentwood, Essex-based Countryside, majority owned byprivate equity firm Oaktree Capital Management, said on Thursdayit would use proceeds from the IPO to reduce debt and toaccelerate development at several sites in Britain.

The listing, expected in February, follows a strong year forUK housebuilders such as Taylor Wimpey Plc, Persimmon Plc and Barratt Developments Plc, which havebenefited from surging demand and a steady rise in house prices.

As well as building on its own land, Countryside works withlocal authorities to develop public sector land - a businessthat analysts say could give the company an edge over rivals asBritain sets aside more funds for regeneration projects.

The company said it would issue new shares, with the aim ofraising about 64 million pounds to repay debt and 50 millionpounds to speed up development of its sites in Acton, Beaulieu,Hazel End and Rayleigh.

A vehicle controlled by Oaktree and some management membersand employees will also sell a portion of their stake.

Countryside said it expected a minimum free float of about25 percent after the IPO. The company declined to estimate itsvaluation.

Countryside, founded by chartered surveyor Alan Cherry in1958, was listed from 1972 to 2005. In 2013, several years afterit had been taken private, Oaktree bought a controlling stakefrom Lloyds Banking Group. ($1 = 0.6960 pounds) (Reporting by Esha Vaish and Noor Zainab Hussain in Bengaluru;Editing by Sunil Nair and Robin Paxton)