General Cable cuts offer price

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The Independent Online
General Cable, the French-owned UK cable group, has dropped the price of its offer for sale to 190p - between 13 and 25 per cent lower than the original target range of up to 255p - because of resistance from investors in the US.

The company is raising £171m through the flotation in London and New York, valuing it at £481m. The previous price range would have valued it at between £557m and £646m.

A spokesman said: "There was a pocket of resistance in the US to the prices in the predicted range." The banking syndicate handling the sale believed that, at 190p, the sale would get away well and there would be a healthy after-market in shares after start of trading this morning.

The spokesman said demand among UK institutions remained strong. Lazard Brothers has been acting as global co-ordinator for the sale with NatWest Securities as joint local manager in Britain.

Speculation over the pricing has mounted since the collapse of shares in Videotron, another UK cable company, listed on the New York Nasdaq exchange earlier this month. Subsequently Nynex CableComms, one of Britain's largest cable firms, said it would postpone a £400m international share offering that would value it at about £1.3bn.

Nynex blamed delays with a review of its draft prospectus by the US authorities, but City analysts said it was probably shaken by the Videotron float and was awaiting the outcome of General Cable.

James Dodd, an analyst with Kleinwort Benson, said he remained bullish about the prosects for the sector but US Nasdaq investors were suffering from investment fatigue.

General Cable is only the second sector listing on the London Stock Exchange, but the sixth on Nasdaq since the dbut of International CableTel in 1993.