Telecom Eireann shares are likely to be priced at just over £3 each when the group floats on the stock market next month.
A prospectus on the issue, to be published tomorrow, will indicate a price range for the shares, with the lower end of the range being somewhere around £2.60 and the higher end about £3.20. The likely float price will be in the middle of this range, in the region of £3.10, valuing the group at somewhere around £6.5 billion.
As reported in The Irish Times yesterday, the Government is planning to sell its entire 50.1 per cent stake in the group. It will sell the vast bulk of this in July's float - provided demand for the shares holds up as expected - just holding on to a small amount to distribute in a year's time as a loyalty bonus to members of the public who hold on to their shares. Shareholders are to be given one free share for every 25 they hold for a year.
The biggest share issue in the history of the State will kick off tomorrow, when the prospectus is launched by the Minister for Public Enterprise, Ms O'Rourke.
The public is to be invited to subscribe for shares from Monday. It is to be given two weeks to apply for the shares, with the float of the shares in Dublin, London and New York to go ahead in early July. The minimum amount of shares which can be applied for will be £250 and the maximum £100,000. Because there is such strong demand for the shares, those who apply for larger amounts will not get all the shares they are looking for and the allocations will probably be scaled back very substantially.
More than 1.2 million people registered their interest in buying shares in Telecom Eireann.
The final price at which the shares will be floated will not be set until just before it goes ahead. The Government and its advisers will try to pitch the price so as to guarantee a modest rise in the share price when it floats.
