Bearish reports force Maid to limit flotation: Market capitalisation cut back to pounds 20m less than originally planned

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The Independent Online
MAID, the business database company, scaled back its stock market flotation to reassure institutional investors following adverse reports about its prospects. Its market capitalisation of pounds 89.1m is at least pounds 20m less than originally planned.

Dan Wagner, chief executive, said: 'We have obviously ruffled a lot of feathers. We are competing extremely successfully with some huge players.'

Reuters is to announce the launch at the end of March of a series of on-line business information products to compete directly with Maid. The new venture will be managed by a senior Reuters executive, Marion King.

Existing Maid competitors are FT Profile, owned by Pearson, in the UK, and Dow Jones and Knight-Ridder in the US.

Mr Wagner said: 'Maid is not a media company, and it is a small company, but those competitors are terrified because we are winning more customers at a significantly higher price every year.'

In January and February the company added 40 new subscribers at an annual fee of nearly pounds 6,000 each. Maid, founded in 1985, buys information from a wide range of providers - including Reuters as well as others such as the Economist Intelligence Unit, Mintel and Datamonitor - and provides it in a standard format to its customers.

Stephen Aulsebrook of Hill Samuel, sponsoring the Maid placing, said it had been heavily oversubscribed and institutional applications had been scaled back. The share price of 110p had been chosen to ensure a healthy after-market. Maid raised pounds 11.6m net of expenses and has postponed the purchase of a new building.

Mr Wagner denied reports that Maid's suppliers could raise their prices sharply. He said almost all were only part of the way into their three-to-five-year contracts and had to give a year's notice of cancellation.

Some institutional investors remain sceptical about the issue. One said: 'There is a huge risk to investors that can only be partly offset by the pricing. It is a question of the maturity of the business, which ought to be allowed to develop longer as a private company.'

Mr Aulsebrook said: 'The company has not been priced on the basis of historic profits, but on its exciting future growth prospects.' Maid had pre-tax profits of pounds 603,000 in 1993 on sales of pounds 5.7m. Dealings are expected to begin on 25 March.