Zeneca cash call on course for 80 per cent take-up

THE pounds 1.3bn cash call by Zeneca, one of the largest yet in the London market, looks likely to be taken up by at least 80 per cent of shareholders. Shares in Zeneca, which was formally separated from Imperial Chemical Industries at the beginning of the month, closed down 1p at 621p on Friday, comfortably ahead of the 600p rights price.

That means a high take-up of the issue, which closes at midnight tonight, is virtually assured.

The final subscription level will depend on the reaction of Zeneca's private shareholders, who hold about 25 per cent of the shares - a higher proportion that at most companies - and whose behaviour is less predictable than that of institutional investors.

A high take-up will be a relief to SG Warburg, adviser to the issue, which is also handling the pounds 5bn sale of the rest of the Government's stake in BT. A low take-up would have dented market confidence and made the marketing of the BT offer much harder.

There was some concern about a flop earlier this month when the shares, which started trading at 682p, fell to 609p on worries about US healthcare reforms and a switch to cyclical stocks by investors.

The rights issue was designed to ensure that Zeneca, which is taking ICI's drugs and agrochemicals businesses, and the remainder of ICI, which will have the industrial chemicals interests, are adequately capitalised after the split. Most of the proceeds will be passed to ICI and Zeneca's borrowings after the issue will be pounds 391m, or 25.7 per cent of shareholders' funds.

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