Flotation flop blamed on Stock Exchange

THE PUBLIC offer element of the Capital Shopping Centres flotation flopped yesterday when applications were received for only 13 per cent of the retail shares.

Roddy Fleming, of Robert Fleming, the merchant bank advising on the issue, blamed the lack of public interest on the Stock Exchange's insistence that 35 per cent of the shares being sold should be offered to the public.

He said: 'The Exchange has misunderstood that the vast majority of private savings are now institutionalised. The so-called retail element only benefits the stags.'

Mr Fleming said the issue had always been aimed at institutions and no discount had been built in to woo private investors. He was neither disappointed nor surprised by the take-up.

A spokesman for the Stock Exchange said that Listing Book rules made it clear that any public offer of more than pounds 50m had to include an offer to the public of at least 50 per cent of the shares. Allowing CSC to offer only 35 per cent to the public represented a concession.

The 230p offer price raised eyebrows in the City because it pitched the offer at a 13 per cent premium to net assets, considered to be a very full price for a new issue.

At that price CSC is valued at pounds 830.3m, making it one of the six largest quoted property companies. CSC's parent company, the insurance group Transatlantic, will retain 75 per cent of the shares when dealings begin next Wednesday.