Poor response likely to BET rights issue

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The Independent Online
THE CITY is braced for a poor take-up of the pounds 200.7m rights issue from BET, the business services group, making it the latest in a series of flopped finance-raising exercises by British companies.

The level of subscriptions for the one-for-four rights issue will be announced this morning. But BET's shares closed at the 110p offer price last night, having dipped 1p below it at one stage, suggesting that the take-up is unlikely to be high. When the issue was announced the shares stood at 133p.

Nick Brigstock, of Barclays de Zoete Wedd, joint brokers to the issue with Cazenove, said it was difficult to estimate the likely subscription. 'A number of institutions have said they will take up their shares but some have said they will not, so it is difficult to guess where the level might be.'

The issue, with which BET wants to redeem part of its dollars 500m ( pounds 260m) of auction market preferred stock, has been fully underwritten, so it will get the cash regardless of the take-up. But if a large proportion is left with the underwriters the stock overhang is likely to mean the shares will remain depressed.

Only pounds 1.6m has been raised through rights issues so far this year, a dramatic fall on last year when companies raised pounds 6.1bn in the first seven months, rising to pounds 9.3bn by the end of the year.

A large number of new issues have flopped. GPA abandoned its flotation while most of the shares in Anglian Group, MFI, The Telegraph and Taunton Cider were left with the underwriters.