125,000 Sids chase British Energy

Private investors had submitted 125,000 applications for shares in the nuclear generator British Energy by last night , making the public offer about half-subscribed, writes Michael Harrison.

The number of applications is running above the level at the same stage in the flotation of Railtrack, when 100,000 investors had signed up for shares with six days to go before the offer closed.

The Government's advisers on the British Energy sale estimate that about pounds 250m worth of applications have so far been submitted by small investors compared with the pounds 500m or so of shares being set aside.

They also denied suggestions that institutional interest in the offer was proving weak in the US and Japan, saying bids for shares from US institutions had been delayed by Thursday's public holiday while the Energy roadshow, led by chief executive Robert Hawley, had only just returned from the Far East.

The public offer closes next Wednesday and, with share shops having logged 1.7 million registrations, it is expected to be at least twice subscribed.

The institutional offer is already fully subscribed at 200p-230p a share, valuing British Energy at around pounds 1.5bn, the middle of the Government's pounds 1.26bn-pounds 1.96bn range. The final valuation could rise if institutional demand picks up before the international book-building exercise closes next Friday.

Some investors have been deterred by worries of falling electricity prices hampering British Energy's ability to pay dividends. But the early levels of public and institutional interest suggest that the offer has been priced sufficiently low to succeed.