Virgin to count on US backers

VIRGIN Mobile hopes US investors will ensure that it has a successful London stock market debut this week after the flotation faced pressure from investors at home. Meanwhile, according to Sunday newspaper reports, Sir Richard Branson will pull the float rather than be forced by the City into cutting the offer price.

Some potential British investors in the mobile phone company owned by Sir Richard Branson have balked at the share price range he has indicated - 235p to 285p.

This would value Virgin Mobile at between £588m and £713m.

The offer is open only to institutions, which, in an uncertain market, want to buy at the lowest possible price.

That led to speculation last week that the company might have to cut its price, or even scrap the float, and City spread-betting firms were quoting an opening price of 230p to 241p.

But this weekend, Virgin Mobile said it was confident of getting the issue away - and within the price range initially indicated. The price will not be set until Tuesday night, ahead of trading on Wednesday.

Senior management headed by chief executive Tom Alexander have spent the past few weeks on investor roadshows in Britain and abroad.

They are believed to have been particularly encouraged by a strong response in America. A successful flotation is vital for Branson, who could raise as much as £300m by selling a 40% stake, which he has earmarked for investment in a new airline venture in the US.

But the move also marks a return to the stock market for the billionaire, who floated his Virgin empire in 1986 - then bought it back.

A successful debut for Virgin Mobile, Britain's fifth-biggest operator with 4.1m customers, could see Branson bring some of his other ventures to the stock market.

Another company due to make its stock market debut this week is Premier Foods, the Branston Pickle-to-Typhoo Tea group owned by American venture capital firm Hicks, Muse, Tate & Furst.

It will keep a 50% stake in the business, which could be valued at about £600m when it joins the market on Tuesday.