Former BP division to float at 160p

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The Independent Online
INSPEC, the speciality chemicals group spun off from British Petroleum, will float on the Stock Exchange at 160p, writes Robert Cole.

The price equates to about 16 times' broker estimates of current year earnings per share.

This means the stock will probably start trading at a discount to other chemicals companies. The sector average prospective multiple is about 18 times.

The unambitious pricing is likely to see the shares rising in value, netting subscribers an immediate gain of at least 20p unless market conditions change.

Inspec also declared a notional dividend that would have produced a yield of 2.7 per cent at the issue price. It is using the flotation to raise money and reduce debt. The company hopes to receive pounds 35m from the issue.

Since parting from BP in 1992, Inspec's sales have risen from pounds 37m to pounds 49m and operating profit from pounds 2.9m to pounds 7m.