Nomura placates investors as William Hill float is scrapped

NOMURA INTERNATIONAL has moved to placate more than 90,000 private investors who subscribed for shares in the float of the William Hill betting shops chain, which was abandoned on Saturday. The Japanese bank decided to sell the group to venture capital companies CVC Capital Partners and Cinven for pounds 825m instead.

In an effort to forestall the anger of investors whose cheques have already been banked, and who were expecting allocations to be announced this morning, Nomura and Cinven/CVC are giving private investors a pounds 20 voucher for a wager on the Grand National. The voucher will be valid at any of William Hill's 1,500 shops in the UK.

Yesterday's move is unlikely to defuse a City row over why Guy Hands, head of Nomura's principal finance business, accepted the venture capital group's offer of pounds 825m for William Hill, after having rejected the same offer from the same two venture capital companies at the turn of the year.

Defenders pointed out that he still made a profit of well over pounds 100m for Nomura, and that the bank was under "massive pressure" from the City not to simply pull the float, one of the options it was considering last week.

Warburg Dillon Read's advice to go ahead with the float, only to see it derailed last week by institutional opposition to the price, is also likely to be questioned.

The float was more than three times subscribed, but last week two key institutions, Deutsche Morgan Grenfell and Phillips & Drew, pulled out, apparently unhappy at Nomura's pricing of the deal.

Some said this proved that the City is not interested in any flotations below pounds 1bn. Others suggested it reflected the lack of growth prospects at William Hill, Britain's second largest betting chain after Ladbroke.

Yesterday Mr Hands commented on the special betting voucher for disappointed investors. "Nomura and Cinven/CVC are putting up the money for this. It's the right thing to do. It isn't healthy if ordinary investors feel they aren't getting a good deal when they dip their toes into the stock market. It will be fascinating to see what the most popular bets are once our voucher has been received."

The private investors, who applied for 124 million shares, equivalent to 40 per cent of the abandoned offer, will also get two weeks' interest at 5 per cent a year on their cheques and get their money back this week, Nomura said.

Under this weekend's sale, John Brown, chief executive of William Hill, will share 10 per cent of the group with the rest of the firm's management. CVC and Cinven will get 45 per cent each.

As for the betting vouchers, Mr Brown said: "We know there are some disappointed investors out there who wanted shares in William Hill. We're effectively saying thank you for your support, here's a chance to make some money out of us after all."

The pounds 20 voucher is for a "double" bet on the Lincoln Handicap on 27 March and the Grand National on 10 April. Punters will need to pick the winner on two of the season's toughest races to scoop a return. The vouchers will be available through the four share shops which handled the float; Charles Schwab, Hargreaves Lansdown, NatWest Stockbrokers and Skipton Sharedealing.

The pulling of the flotation will mean a sharp cut in the fees payable to Warburg Dillon Read and the syndicate of stockbrokers it lined up to handle the issue. Fees could have been as high as pounds 15m if the float had gone through.

The first signs of trouble for the issue appeared last week when Warburg was forced to cut William Hill's proposed float price to 135p a share, from the original indicative range of 155p-175p published at the beginning of the month.

The reduced price valued the bookmaker at pounds 780m instead of pounds 840m-pounds 900m. Cinven/CVC's price was in the middle, equivalent to 150p a share.

Nomura, a division of Nomura Securities, bought the company from Brent Walker Group for pounds 700m in October 1997. It is selling its entire holding.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Written protest: Julia Donaldson, author of The Gruffalo, has sent an open letter to the Culture Secretary
books
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
ebooks
ebooksA special investigation by Andy McSmith
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Sport
footballDoes Hodgson's England team have an identity yet?
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss