BSM priced at 47m pounds: Driving school float to wipe out gearing

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The Independent Online
BSM GROUP, Britain's biggest driving tuition business, will be valued at pounds 47.7m when it comes to the stock market at the end of the month, writes John Murray.

The company is floating via a placing and intermediaries offer. Yesterday's placing element - representing half the 19.89 million shares on offer - was reported to be comfortably oversubscribed by institutions. Seventy-one per cent of the company's share capital is being sold.

The price of 170p puts the shares on a multiple of about 15 times forecast earnings this year. The company predicted pre-tax profits of pounds 4.35m on a pro forma basis and quoted a notional dividend of 5.78p, giving a gross dividend yield of 4.25 per cent.

The pounds 32.2m net raised by the issue will be used to wipe out the group's debts, incurred when the business was bought out by management in 1990. The directors will be left with 1.7 per cent of the company after flotation. Dealings are due to start on 27 October.

BSM, which was founded in 1910, has about 14 per cent of the driving instruction market in Britain. It operates through 134 branches spread throughout the country and has 2,000 self-employed driving instructors on its books. It taught more than 100,000 people to drive last year.

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