Lawsuit forces delay to Wolfson flotation
Tuesday 14 October 2003
The stock market flotation of Wolfson Microelectronics was delayed for two days yesterday after the chip-maker was forced to prepare more documentation relating to a US lawsuit.
Cirrus Logic said last week that it was suing Wolfson for patent infringement - alleging that 15 of its products infringe two of its patents.
While Wolfson insists the case has no merit, it must include the information in its prospectus and is now preparing an extra supplement.
The extra work involved means shares in the Edinburgh-based company are expected to start trading on the London Stock Exchange on Thursday - two days later than originally planned.
It has not, however, dampened demand for the issue - the first major technology flotation since the IT services company Detica listed in the spring of last year.
Demand for Wolfson shares, which are expected to be priced toward the top end of the 155p-210p range, is said to have been "phenomenal".
One City source said he was expecting the shares to be priced at 210p - which would value the business at about £213m - and said the issue had been well oversubscribed, possibly by as much as 18-20 times. "The whole world seems to want it," the source said, adding: "Nobody has pulled out." The grey market price for the shares was about 290p yesterday.
Wolfson said it had reviewed Cirrus' allegations with its legal advisers but believed they "do not have merit" and said it would "vigorously defend itself". It said it did not believe the allegations would have "a material adverse effect" on its business and said it did not expect to have to make a provision in its accounts for the claims.
The company, which makes chips which sit inside gadgets like DVD players and games consoles, is hoping to raise about £25m of new money in the float.
Of its largest shareholders, two - Scottish Enterprise and City of Edinburgh - are selling all their shares in the float while another two, UBS Capital and WestLB, are cutting half their holdings. Co-founders, David Milne and Jim Reid, are not expected to sell of any their holdings, which stand at about 4.5 per cent and 2.5 per cent.
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