GUS pushes on with Burberry float

WHETHER brave or foolhardy, retailer GUS is going ahead with the Burberry float today. It has priced the shares at 230p, at the bottom of the 230p-290p range. The decision to proceed despite market turmoil will puzzle some City experts.

But GUS finance director David Tyler said there were few signs the market would improve if the float were delayed. 'Clearly we would have liked a higher price, but we did not have to squeeze every penny out of this deal,' he said. 'It is very difficult to put off flotations without it being inferred that there was no support for it. The institutions have shown they support it.'

GUS is floating 22.5% of the company. It has given Merrill Lynch an option to issue another 3% if demand is high. The float values Burberry at £1.15bn and raises £258m. Burberry boss Rose Marie Bravo gets a 1% stake worth £11m, plus options over another 1%.

If Burberry had been priced at 290p, another £67m would have been raised. 'This is the equivalent of just 7p on the GUS share price,' said Tyler. 'I think the shares would have fallen more than that if the float had not gone ahead.'

GUS is one of the only companies willing to brave the current market. Focus Wickes and Yell have scrapped their floats. GUS fell 15 1/2p to 556p.