Yes TV slows roll-out after cutting third off float valuation

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The Independent Online

Yes television, the video-on-demand group, is to scale back the roll-out of its services after cutting its valuation in its forthcoming flotation by a third yesterday, from £810m to £559m. Yes said the lower valuation was in line with recent falls in technology stock markets.

The company is now raising £127m - almost £70m less than previously intended - by issuing fewer shares than planned at 175p, 30 per cent less than the midpoint of the existing range. Steve Garvey, the head of marketing, said Yes had chosen not to issue more shares at the new price so as not to dilute the stakes of existing shareholders. These include Warner Brothers and Buena Vista International, the Hollywood studios.

"The problem is renegotiation with current shareholders. It's not a conversation we would relish [with Warner Bros]," said Mr Garvey.

He said Yes could still pursue its business plan despite the £66m shortfall in the offering's proceeds. However, the pace of both the European and UK roll-out of Yes's video-on-demand services would be slower.

"We've had to trim our ambitions and cut our cloth according to market conditions," he said. "But if this had an impact on our business, we would not have been allowed to float."

Under stock exchange rules, companies must show they have sufficient funds following flotation to satisfy working capital requirements for two years. Sources close to Yes said the £127m proceeds from the float would satisfy that easily and the previous £193m was to allow "some headroom" to take on competition in the crowded video-on-demand marketplace.

Yes is offering 76.5 million shares, 4.5 million fewer than previously, amounting to 24, rather than 25 per cent of the group's equity. It is e-mailing a supplementary prospectus to applicants in the retail share offer, who must now reconfirm their subscription by 6pm on Friday. Fifteen per cent of retail investors who subscribed to the earlier float have since withdrawn, Yes said. The shares are to list on Monday.

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