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UK telecom IPO advances
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November 10, 1999: 6:56 a.m. ET
Thus stock rises as much as 25%; company's value reaches $4.2B
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LONDON (CNNfn) - Britain's latest telecom IPO started life with a bang Wednesday, soaring more than 25 percent immediately after it hit the market before settling down to a more modest gain.
Thus, which is being spun off from utility ScottishPower (SPW), touched 395 pence per share in early London trading, well above the 310 pence per share at which the company was sold to investors.
By mid-morning, some of the early excitement had died down, although Thus (THUS) shares were still well into positive territory at 355 pence. The company is valued at £2.5 billion ($4.2 billion).
Earlier Wednesday, ScottishPower had set the price for the IPO toward the low middle of the indicated range of 300 pence to 325 pence. The offering was nine times oversubscribed, even though Scottish had initially valued the company at only £1.5 billion.
Thus -- formerly known as Scottish Telecom -- offers data services over its network, and also owns Demon Internet, one of Britain's largest Internet service providers. Demon was bought in 1998 for just £66 million, but analysts say is now valued at more than ten times that figure.
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