City cool to cable float

GENERAL CABLE, the cable television company, has got off to a sluggish start in securing expressions of interest from potential buyers of its shares ahead of its £600m flotation this week.

UK institutions have committed for fewer than one-third of the 40.5 million shares on offer in Britain, with only two days left for "book-building" - the process of securing buying commitments.

Advisers to General Cable, which was forced to cancel its flotation last year because of unfavourable market conditions, are confident demand is there. But the timing of the Easter weekend means that potential investors are delaying their bids until the last moment.

The company, chaired by Lord Rees, runs cable TV franchises in Yorkshire, Birmingham and West London. It plans to raise £198m to £230mof new capital, valuing itself at between £557m and £646m, and has opted for a dual listing in London and on the US Nasdaq exchange. Forty-five per cent of the shares will be offered in the UK, 45 in the US and 10 per cent elsewhere.

Investor sentiment for cable companies is lukewarm in the US. Videotron, the UK company that floated in the US three weeks ago, was forced to reduce its price below the range in its prospectus to get the issue away.

Some US institutional investors, smarting from losses in National Power and PowerGen shares, remain wary of issues by British companies. In the UK, cable is still a novelty to investors. TeleWest is the only listed cable company, and its shares are trading below the issue price.

The float will cut Compagnie Generale des Eaux's stake in General Cable to 58 per cent.