CSR pricing shows investors regaining appetite for floats

A flood of stock market flotations was predicted yesterday by brokers after three companies made highly bullish announcements regarding initial public offerings (IPOs).

Cambridge Silicon Radio (CSR), the technology group, announced it had raised £78.7m from its IPO with shares being priced by broker CSFB at 200p, at the top of its 160p-200p range. The shares closed the day at 246.25p revealing strong demand. At the same time Eircom, Ireland's biggest telecoms group, announced plans to float on the London market in the first half of March, raising at least ¤300m and valuing the business at ¤3.5bn, including ¤2.2bn of debt. OHM, a new oil exploration company, also said it would proceed with its £30m flotation, while on Wednesday Civica, another technology company, said it planned to float with a value of £79.2m.

There is now a growing list of companies preparing to come to the market with nearly 40 companies already planning IPOs, both on the full, official list of the London Stock Exchange (LSE) and on AIM, the LSE's junior market. The activity is expected to increase as the year develops, making 2004 almost certainly the busiest year for floats since the height of the boom in 2000. According to LSE figures, there were just 17 floats in the whole of 2003 on the main market, with a value of £4.7bn, while AIM saw 66 IPOs in 2003 with a total of £1.6bn.

Brokers believe that institutions are showing a renewed appetite for good quality companies but are far more discerning than in the previous technology-led IPO boom. Tim Linacre, the chief executive of capital markets at Lazard, the investment bank which recently bought brokers Panmure Gordon, said: "There is appetite for good quality companies without a doubt, but institutions are being very selective so advisers are having to be careful. Institutions are being very straightforward and severe. They are looking at businesses and saying: 'If we invest in this, will we make money?' They want the IPO to be properly done, the business to be in excellent shape with a strong growth story, and properly priced and structured."

Brokers are coming up with ways for good quality privately owned companies to float, allowing their backers to sell 100 per cent of their holdings, further encouraging IPO activity.

Numis, for instance, is floating Centaur, a media company, for about £140m-£150m. It has formed a new company to buy the business, which it pays for by simultaneously issuing shares to institutions. This is a new form of the so called "accelerated" IPO pioneered by Collins Stewart to handle last year's Center Parcs float. Centaur pulled a float in 2001, since when profits declined but investors are still keen to back the group, further reflecting the strength of the IPO market.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence