Anglian Group adds to string of new offer flops

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The Independent Online
ALMOST 90 per cent of the public offer for shares in Anglian Group, the double-glazing company, were left with the underwriters, making it the second new issue to flop within a week.

Applications were received for only 2.5 million of the 21 million shares available in the open offer despite the price being set at 210p, 40p below the guide price in the pathfinder prospectus.

The remaining shares have been taken up by more than 50 institutional sub-underwriters, while a further 21 million were placed with institutions last week.

The failure of the issue underlines the lack of enthusiasm for new issues among institutional investors. Last week 10 million of the 13 million shares offered by The Telegraph were left with the underwriters, while last month GPA was forced to pull its dollars 1bn issue because of lack of interest.

The string of failures will increase nervousness about prospects for other issues in the pipeline including MFI, which is raising pounds 669m, and Wellcome, where pounds 3bn is being raised through an international tender offer.

The poor market for flotations had already forced MFI to cut back the price of its offer, which closes on Friday, to 115p a share compared with earlier expectations of up to 150p. But the uncertainty did not deter Taunton Cider, which yesterday launched a pounds 65m offer priced at 15 times historic earnings - a premium to its main competitor, H P Bulmer.

Despite the low take-up, Anglian's advisers hope the shares will open at a premium when dealings start next Wednesday. A spokesman said that some requests for shares in last week's placing had been cut back and he believed the sub-underwriters would want to hold the shares rather than selling them when trading begins. 'It is obviously disappointing that more people have not availed themselves of an opportunity to buy the shares,' the spokesman said. 'But if you look at the original aims of the issue - to raise money and get a public listing - these have all been achieved.' He did not think a lower price would have encouraged investors to subscribe.

Anglian raised pounds 88.4m by selling half the company's shares. Of that pounds 56.5m was through the issue of new shares by the company, with the remainder sold by investors who backed the management buyout from BET in 1990.

The directors, led by Bill Hancock, managing director, sold 1.65 million shares, raising pounds 3.5m between them. Anglian said that 290 of its employees had taken up priority applications, which offer 25 per cent discounts if the shares are held for two years.

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