1.7m Britons apply for BT shares

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Almost 1.7 million private investors in the UK have applied for nearly all the shares on offer in the Government's pounds 5bn sale of its remaining 22 per cent stake in British Telecommunications.

Last-minute counting showed that the British public want more than a billion shares out of a total of 1.2 billion available to private and institutional investors worldwide.

The Government has earmarked a minimum of half the shares and a maximum of 67 per cent for the British public. Strong demand makes it likely that applications from private investors wanting large numbers of shares will be scaled back.

The average application from the British public was for 634 shares, representing an investment of pounds 950 on the first instalment price of 150p. Almost 1 million people applied through high street share shops operated by banks, building societies and stockbrokers, with the remainder going through the traditional route of the Share Information Office.

Those using share shops also tended to apply for larger numbers of shares. Sixty per cent of applications came from existing shareholders and employees.

Institutions have been bidding for the new BT shares at up to 12p more than the price of already-traded shares, which closed last night at 408.5p. The price of the shares, and the allocations for private investors, will be decided by the Treasury today at a meeting with its adviser, the merchant bank SG Warburg.

The final price and share allocations will be announced tomorrow, with dealings in the partly-paid shares beginning on Monday. Some analysts see the new partly-paid shares at 172p-175p soon after dealings start. The first instalment price for institutions is 160p - 10p more than small private investors' initial payment.

BT's profile among investors in the US was heightened after the company anounced plans for a dollars 5bn link with MCI, one of the largest long-distance telephone network companies in North America.