Market gyrations fail to sink IPO plans

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A host of companies yesterday vowed to press on with their planned flotations despite the stock market's gyrations and a warning from bankers that it would now be harder for companies to list in the coming months.

News that five US technology companies, led by AltaVista, the internet search engine, had postponed their flotations, failed to dent the enthusiasm of UK companies planning initial public offerings (IPOs). Some proclaimed they would benefit from the market's flight to quality. Others cited yesterday's rise in shares of T-Online, the German internet service provider, on their first day of dealings. T-Online closed up 9 euros at 37.50 euros.

XTL, an Israeli biotech company, unveiled plans to raise £25m to develop treatments for hepatitis. Dr Martin Becker, chief executive, said he expected further Israeli biotechs to list in London following marketing trips to Israel by the London Stock Exchange. "Whether it be a good market or a bad market, one is worried about receptivity of the stock," he said.

Weston Medical, another biotechnology company, was similarly sanguine, publishing its prospectus to raise £55m in a float valuing it at £219m. Christopher Samler, the chief executive, said: "The pricing reflects the market's volatility. We don't anticipate reducing our price range, but it would be a foolish person who would say that's for certain." Weston met 20 fund managers yesterday, and Mr Samler reported an enthusiastic reception.

Printhouse, an online printing company, unveiled plans for an Ofex float valuing it at £15m. Grant Shapps, the chief executive, said: "The volatility may see other IPOs based on shaky premises being pulled. But investors will still have to go somewhere, and unless you think the capital markets are going to fall apart, it's still a good time to float."

Likewise, Project Telecommunications, the phone services company, pledged to proceed with a listing valuing it at £250m. "There's a flight to quality and the company has a few things going for it in this respect," said a spokesman.

Meanwhile, Big Yellow, which operates storage sites for small businesses with stock storage difficulties, confirmed it would have a market capitalisation of £97m when it starts trading on 8 May.

Even so, bankers in the capital markets remain cautious. Gareth Lake, a vice-president of Schroders, said: "Everyone is pulling floats. There are some that have decided to go ahead but they will face very tough questioning. Some fund managers won't invest in any IPOs." Mr Lake expected conditions to be tough until July, with only around 15 per cent of the slated IPOs likely to be successful. "Bankers will brag about what they can get away, but if you make a public statements about listing or pricing, you're going to have to be very confident in your story."

David Barbour, manager of corporate finance at Robert Fleming, which postponed the flotation of video on demand company Yes TV at the weekend, said: "Volatility is always an issue for companies coming to market, although when you're looking three months ahead you can never be certain of the state of the market."