An adviser on the sale said that the Government had favoured those who bid aggressively and had a record of not selling out quickly once dealings began. This level of discretion is unprecedented in a Government share sale.
An official spokesman declined to say whether any institutions have been penalised for selling already-traded shares in the companies to deliberately depress the price. The Government has been tracking dealings in the shares of the two generators for almost a year.
The shares on offer have been priced at 486p for National Power and 522p for PowerGen compared with closing prices on Friday of 457p and 492p respectively for already-traded shares. Investors in the UK public offer receive a 10p discount on the amount paid by institutions, putting the price for National Power shares at 476p and 512p for PowerGen.
The level of public demand for shares means that half of the private investors who applied will get less than they wanted and a few none at all. Many of the applications for more than 300 shares have been heavily scaled back. Apart from existing shareholders and employees, those applying for 2,500 or more shares will receive none.
Those who failed to apply through the Government's approved share shops receive a maximum of 300 shares, with anyone in this category who applied for more than 400 shares receiving none.
The Government has favoured existing shareholders - who accounted for almost a quarter of those who applied through share shops - awarding them full allocations for applications of up to 500 shares. Although allocations above that level are scaled back, even those wanting 20,000 shares or more will receive 30 per cent.
The Government has reserved 51.3 per cent of the shares on offer for the UK public and a further 5.3 per cent for private investors taking part in the "retail tender", part of the international offer. The number of shares for institutions was also reduced by National Power buying back 7.7 per cent of its total shares through the offer and PowerGen 7.6 per cent.
The Government said that at the offer price, allocations to institutions of National Power shares were covered 6.5 times and PowerGen's 9.1 times. Dealings in the partly paid shares begins today and interim certificates are due to be despatched on 13 March.