Premier Foods also cut back its share price to get its float away yesterday, another victim of the malaise in the new issues market.
The company, which makes Branston Pickle and Ambrosia custard,priced its shares at 215p each, below the advisers' original range of 230p to 260p.
The float raised a higher-than-expected £350m, despite Premier scaling back the amount of new equity on offer from £130m to £118.5m. Hicks, Muse, Tate & Furst, the private equity vehicle that owns Premier, raised the amount of shares it sold by £60m to £231.5m. The move means at least 65 per cent of the equity has been sold in the offer, although this could rise to 75 per cent if an over-allotment option is exercised.
Hicks, Muse bought Hillsdown Holdings, the company that was to become Premier, in 1999 and has since spent some £240m on acquisitions from Nestlé and Unilever.
Premier, whose brands also include Typhoo Tea, had tried to convince investors that it faced less competition than a number of its rival food manufacturers because it has such strong brand labels. Northern Foods and Geest have both issued profits warnings recently. But fund managers were concerned about sluggish sales and were only willing to take on shares at a lower price.
The new price gives Premier a market capitalisation of £532m, still making it one of the largest listings this year. Trading is due to start today.