BT sale will raise pounds 5bn for Treasury

THE GOVERNMENT intends to sell all of its remaining 22 per cent stake in BT in mid-July, raising more than pounds 5bn for the Treasury coffers at the current market price.

The offer is being aimed at the British public. They will be bombarded with a huge advertising campaign starring the comedian Mel Smith and will be allocated at least half of the shares, depending on demand. Preference will be given to investors who buy through a network of share shops.

The public will also receive a discount to the price paid by institutions. The size of the discount, to be given on the first of three instalments, will be announced in mid-June. Further discounts or bonus shares will be offered to encourage small investors to keep their shares. Payment is likely to be spread over 12 or 18 months.

The final price of the shares will be decided by the Treasury just before the sale date, based on indications by institutions of the amount of shares they want and the price they are willing to pay.

The prospectus is to be published on 29 June, when worldwide marketing to institutions will begin in earnest. British institutions will be forced to bid for shares against others in the international offer.

S G Warburg, the global co-ordinator of the offer, said that institutions buying already-traded BT shares between 21 May and the close of the new offer would be given preference in allocating the shares.

'Those who go out of their way to engage in market activities which are adverse to the offer will be looked at in a disfavourable way,' said the bank's James Sassoon.

Private investors will also be able to bid through brokers to buy shares in the international tender. They may do so on the same terms as institutions without the incentives and discounts available through the public offer.

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