According to the Sunday London Times, the offering has been oversubscribed 20 times.
the-times.co.uk
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. |
