Energy investors hit by PO delay

Thousands of private investors are set to miss today's deadline to register for shares in British Energy because of the mail backlog created by last Friday's postal strike.

Well over a million investors are expected to express an interest in applying for shares in the Government's controversial privatisation of the nuclear industry by the time the offer closes at noon. But others who are keen to qualify for incentives are bound to be disappointed when they discover their applications are still stuck in the post.

A spokesman for British Energy admitted most registrations were made by post, even though investors were encouraged to telephone share shops to register their interest.

But he added people would have to be "pretty stupid" to leave registration until the last minute when plans for a nationwide one-day postal strike had been known for weeks.

A last-minute rush to register for shares has been a feature of previous privatisations. However, the pattern is more pronounced at the later, application stage when many investors monitor stock market conditions until the last possible moment before sending off their cheques.

British Energy's prospectus, due on Wednesday, is expected to follow Railtrack's lead by offering shares to small investors at a discount of about 5 per cent to the price institutions will have to pay.

The sweetener would be on top of the promise of a first-year dividend of 13.7p, totalling pounds 96m and payable out of loss-making British Energy's reserves. A discount of 10p a share is also being offered on the second instalment payable in September 1997. If demand is strong, the size of the public offer could be raised from 30 per cent to as high as half the company.

The prospectus is also expected to set a price target for the British Energy float of between pounds 1.3bn and pounds 1.9bn - far less than the Government originally anticipated. The range illustrates the depth of divisions among City analysts about the value of the company.