Lawsuit casts cloud over Wolfson float

Would-be investors in Wolfson Microelectronics, which is in the middle of a flotation, yesterday expressed concern about a potentially large lawsuit which only came to light on Thursday evening.

Would-be investors in Wolfson Microelectronics, which is in the middle of a flotation, yesterday expressed concern about a potentially large lawsuit which only came to light on Thursday evening.

Wolfson is planning to close its fundraising on Monday afternoon, with pricing due later next week. However, the group was hit by a lawsuit from a US competitor, Cirrus Logic, on Thursday night.

Sentiment towards the chip-maker had been positive but potential investors said yesterday that the legal case was worrying.

Wolfson was only able to put out a holding statement yesterday. It will be studying the case over the weekend and is expected to make a more detailed announcement on Monday morning. Wolfson hopes to raise £25m in new money.

Some investors questioned the timing of the lawsuit, so close to Wolfson's initial public offering. Cirrus is claiming that some of Wolfson's products infringe the patents on two of its chips. It is understood that Wolfson has made the products at issue for some time. Nevertheless, the grey market price for the Wolfson offering was 280p-290p yesterday, well above the 155p-210p official pricing range.

Separately, IP2IPO Group, the intellectual property (IP) business, announced that it has raised £30m from its flotation, giving it a stock market value of £112m. Dealings in the shares will begin on Wednesday next week.