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Egg rolls higher after IPO
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June 12, 2000: 8:55 a.m. ET
Debutant online bank rises 10% on London exchange
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LONDON (CNNfn) - Online bank Egg's shares rose to a 10 percent premium above its offering price when dealings in the stock started Monday, the relatively modest gain offering the latest sign of the investor caution that has bedeviled Europe's beleaguered Internet initial public offerings.
Egg (EGG) shares were priced at 160 pence each over the weekend, valuing the offshoot of Prudential Plc (PRU), Britain's largest insurer, at £1.3 billion ($1.9 billion). At its flotation price Egg ranks as Britain's 12th-largest bank by market value. 
The shares jumped as high as 185 pence in early trade Monday, but eased to 176 pence after several hours of trading. The issue was more than nine times oversubscribed, a testament to the perceived strength of Egg's franchise in the face of disastrous showings by other recent Internet IPOs.
"The success of the IPO of Egg is a strong endorsement of the strength and quality of the business," Prudential Chief Executive Jonathan Bloomer said in a statement.
The market for Internet-related issues in Europe has soured in recent months amid a number of high-profile failures. Several major IPOs have sunk well below their issue price.
Egg raised £150 million in the offering of 147 million shares, and Prudential recouped £86 million while retaining an 80 percent holding in the company. The price was near the top end of the indicated range of 130 pence to 175 pence, although Egg's market value is less than half the £4 billion analysts had forecast for the company earlier this year at the height of the "dot.com" boom. 
Some Internet IPOs have been canceled or postponed, but Prudential pressed on, after some apparent dithering. The IPO shows investors in Europe retain an appetite for Web IPOs, but have become more choosy about which companies to back. The flotation of Europe's largest Internet access provider, T-Online, went well, but others, including Lycos Europe and Dutch Internet access company World Online, have proved disastrous. 
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