Brisk trading greets ICI's demerger of Zeneca

IMPERIAL Chemical Industries, one of Britain's biggest manufacturers, became smaller yesterday as it formally spun off its drugs and agrochemicals business into a new company, Zeneca, writes Heather Connon.

Trading in both shares, quoted officially for the first time, was brisk with 10 million Zeneca shares and 6 million in the new ICI - which will encompass the industrial chemicals, paints and explosives businesses - changing hands. That compares with an average of about 1 million a day in the three weeks prices were quoted in the unofficial 'grey' market.

New ICI again had the best of the dealing, closing up 29p at 636p while Zeneca was 2p lower at 630p. When grey market trading began on 12 May new ICI was 569p and Zeneca 682p.

The demerger was accompanied by the launch of a pounds 1.3bn rights issue by Zeneca. It has been conducting roadshows to stimulate interest in the group overseas and SG Warburg, which advised on the demerger, yesterday opened its syndication desk, which aims to encourage international investors to buy the nil-paid rights. It said there had been interest from Europe, Japan and the US, but the nil-paids closed 3p lower at 34p.

Warburg denied that rules imposed by the US Securities and Exchange Commission could damage the rights issue. These stipulate that, if the price is between 666p and 600p in the five days before the issue closes on 21 June, the 12 brokers involved deal only on behalf of clients and cannot make markets on their own behalf.