Yes TV to slash 25% off price for revived float

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The Independent Online

Yes Television, the video-on-demand broadcaster that called off flotation plans in April after the slump in hi-tech shares, is set to announce a dramatic cut in its offer price.

The company will float on techMark, the hi-tech shares index, on 22 May. Analysts expect the offer price to be about 25 per cent lower than the original price of 250p.

The company said it had taken a number of steps to avoid a repeat of the fiasco surrounding the flotation of lastminute.com following a "flood" of inquiries from concerned potential investors.

The price - to be confirmed this week - will be set by Yes's adviser and bookrunner, Robert Fleming. The company yesterday said it was anxious to ensure that it did not over-value the company and risk a slump after the flotation.

An insider said: "We have absolutely no intention of letting what happened with lastminute happen in this case. It takes a company a very long time to shake off that image." Investors in lastminute saw their shares drop by more than half in the four weeks after it was floated in March.

The source said that Yes would not use the market as a barometer and raise the offer price if demand proved to be strong. Morgan Stanley Dean Witter, the investment bank which advised on lastminute's placing, was heavily criticised for more than doubling the offer price to 380p after prices on the "grey" market surged ahead of the initial offer price.

Yes will not cash any cheques until it confirms that investors want to go ahead with the new share issue. It will contact them this week. No new private investors will be able to take advantage of the issue, and only those already registered to buy shares will be eligible.

The maximum number of shares that will be available to private investors has not been confirmed. Fifteen per cent of the offer has been set aside for retail investors, but it is not yet known how many people will choose to go ahead with their orders.

Yes suspended plans to float last month after technology shares plunged 25 per cent in value in the UK and US on the eve of the offering. The move followed a similar decision by Deutsche Telekom's T-Online.

The Yes insider said: "We could have pushed ahead in April because the order book was more than half full. But we didn't because we didn't want our investors to hate us."

At the time Yes issued a new timetable setting 22 May as the new date for the placing. This weekend it emerged that the company would stick to this schedule after hearing from institutional investors who were keen to press ahead with the flotation.

Yes, which intends to offer pay television, access to the internet and video-on-demand, is floating 25 per cent of the company. If it does cut the price by a quarter, this will value the offering at £460m and reduce the proceed it aims to raise from the flotation from £193m to £145m.

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