Intermediary offer brings Wetherspoon to market

THE USE of intermediary share offerings in flotations appears to be gathering pace. JD Wetherspoon, the pub operator, yesterday confirmed it was coming to the market via the device, which enables brokers' private clients to buy some shares, writes John Shepherd.

Intermediary offers are designed to improve the post-flotation trading of shares. They ensure that a large part of the equity is broken up into small parcels.

Today's is the second such offer this week. On Tuesday Trinity Holdings, maker of Dennis vehicles, announced similar plans.

A pathfinder prospectus for Wetherspoon's flotation has been issued by Kleinwort Benson, the merchant bank.

Most of the key financial details are being kept secret for another fortnight, but the offer will raise about pounds 24m and will value Wetherspoon at more than pounds 40m.

The company has 44 pubs, mainly in London, but needs cash to develop another 18 sites. Most of its pubs are converted shops or car showrooms and cost, on average, pounds 500,000 to alter.

Tim Martin, Wetherspoon's founder, will own about 25 per cent of the company after flotation. However, it will lose Scottish & Newcastle as a shareholder. The brewer is selling its 17 per cent stake, bought at pounds 12 a share.