Monsoon comes to market at second attempt

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The Independent Online
Monsoon, the women's fashion retailer, has succeeded in its second attempt to float on the stock market. The group's advisers yesterday announced that the institutional placing had been over-subscribed at an offer price of 198p. This values the group at pounds 352m.

There had been concerns that investors would spurn the float because of the difficult retail climate and concerns about the group's high margins and growth plans. The group's unsuccessful attempt to come to the market in 1996 was also a concern for some. The float had to be pulled due to concerns over the ultimate beneficiaries of a Maltese-based trust which owned the bulk of the shares. This time, the group's adviser, NatWest Markets, is said to have assembled a "blue-chip shareholder register''.

However, some still expressed concerns over the pricing. "They are floating it at three-and-half times turnover, which looks quite remarkable ," said one senior fund manger who decided not to invest. Another, who also decided not to buy the shares, said: "It's a rag trade company. Fashions wax and wane and companies get it wrong. We weren't enthused by it."

The price gives the shares a forward p/e ratio of about 18. This is a slight discount to the retail sector but a premium to the market. SG Securities said the price left "no margin for error" and claimed a price of 150p would have been more realistic.

The float will net the Monsoon founder Peter Simon a windfall of pounds 88m. Mr Simon and his family will still own 74.6 per cent of the company following the flotation. No new money is being raised.

Dealings in the shares are expected to start next Wednesday.

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