Drop in new registrations for BT3 share sale: Prospectus sparks late surge of interest

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THE BT3 share registration period has closed with only about 2.6 million private investors expressing interest for the first time - almost 2 million fewer than when the last tranche of BT shares was offered in 1991, writes Mary Fagan.

The total number registered for the Government's pounds 5bn sale will not be known until next week, but is expected to be about 5 million. Of those, 2.4 million are existing shareholders or employees who are automatically registered for shares.

The 1991 campaign attracted 4.5 million new registrants out of a total of 5.5 million who expressed interest in the offer.

The low response to BT3 came despite an expensive television and poster campaign featuring the comedian Mel Smith as the hapless Inspector Morose.

The disappointing figure could prompt institutions and large investors to pitch their bids at the lower end of government expectations. The first signs of where they will aim the bids could be seen in next week's BT share price movements.

Government advisers said that the number of people registering was boosted at the last minute by the publication on Tuesday of the prospectus for sale.

When the previous tranche of shares was sold, registrations closed a few days before the prospectus was released.

Kenneth Clarke, the Chancellor, said last week he was pleased with the progress of the third and last sale of the Government's BT shares.

At least half of the shares on offer are reserved for the UK public. The allocation will be increased to up to two-thirds, depending on the level of demand - which was the case in the previous share sale. This time, the total number of shares on offer is 1.22 billion, compared with almost 1.6 billion in 'BT2'.

Details of the pattern of demand from individuals are unlikely to emerge until after the close of the public offer at 10am on 14 July.

UK private investors will pay 150p per share for the first instalment - a discount of 10p to the 160p payable by institutions. Small investors are also assured a 10p discount on the second and third payments.