from London SUNDAY TIMES,,re... FREESERVE, bodes well for CY
July 25 1999
BUSINESS NEWS
©
Paper millionaire: chief
executive Pluthero
Freeserve share rush sparks
hefty cutback
THE number of shares that investors have subscribed for in
Freeserve, Britain's biggest internet service provider, is to
be dramatically scaled back. Investors who have applied
for stock but are not users of Freeserve will receive no
shares at all. Such has been the demand - the offer has
been 20 times over-subscribed - that Freeserve's shares
will be priced at 150p, at the top end of its flotation range.
The shares are expected to soar to an immediate premium
of at least 30% when trading starts tomorrow as individuals
and fund managers scramble for the first big internet
offering in Britain. Prices in the grey market suggest the
shares could finish the first day of trading between 209p to
215p, but this could be conservative. Dixons, the electrical
retailer which is Freeserve's founder and largest
shareholder, will initially retain an 81.75% stake in the
company although this will be reduced over time to meet
further demand. CSFB, Freeserve's financial adviser, is
confident that most investors will hold the shares for the
long term and will not stag the issue. CSFB, also the float
sponsor, is today expected to work out how much of the
stock will be allocated to fund managers and how much to
retail investors. The float will make John Pluthero,
Freeserve's young chief executive who pioneered the
concept, a paper millionaire. There has been a lot of
negative sentiment from brokers regarding the Freeserve
float but investors should not be deterred. It will take a lot
longer than a week before the enthusiasm for Freeserve's
shares wanes.
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