Yell and Focus ditch share floats

YELL, the Yellow Pages company, today abandoned its flotation because of tumbling stock markets and falling investor confidence. The decision comes only hours after Focus Wickes, the DIY retailer, pulled its £1bn float.

However, retail and business services group GUS is going ahead with the £1.4bn initial public offer of its Burberry luxury retail brand. 'We're going ahead with the listing,' a GUS spokeswoman said.

Conditional dealings on the London Stock Exchange will begin on 12 July.

Yell had given an indicative price range of 270p to 345p a share, valuing it at between £1.8bn and £2.3bn. The company, owned by venture capitalists Apax Partners and Hicks, Muse Tate & Furst, cited 'poor equity market conditions' as the reason for its decision. Focus Wickes said: 'Investors are very nervous about committing until they get a clearer view of how the market is going to settle.'

A source close to Yell, which is run by John Condron, denied that the decision was a panic reaction to the latest market shock triggered by the discovery of the WorldCom fraud. 'Demand from investors was very good,' he said. 'They like it, but they're investors. They're going to take advantage of market conditions, and the venture capitalists are not going to sell it into markets when they are not going to get value.'

He said that since the price range for Yell had been set, the market had fallen by 12% and the telecoms sector had lost 20% of its value. 'The venture capitalists are not under pressure to sell and there is no reason for them to sell at a price that is silly,' he said

However, the continued market turbulence seems likely to kill off the promising signs of life in the UK initial public offerings market detected in the last quarter. There were nine new issues during April, May and June that raised a total of £2.74bn, more than double the number that floated during the same three months last year.

Neil Austin, head of new issues at KPMG, said: 'There is concern that the upturn in the IPO market may prove short-lived. New issues for the first five months of this year were launched against a backdrop of a relatively stable stock market.'

Attention will now turn to Burberry. The fashion group's advisers set an indicative range for its shares of between 230p to 290p, and the initial feedback from the roadshow has been positive. However, the grey market price has steadily come down, Cantor Index today quoting 248p-255p.

SOLAR cell-maker Intersolar showed it was undeterred by volatile market conditions as it announced plans to float on the stock exchange. The Oxford-based group is expecting to raise £18m and be valued at up to £50m when it floats at the end of July.