The missing millions

By THIS IS MONEY
Updated:

 

IF FASHION house Burberry floats on Friday, it will make chief executive Rose Marie Bravo a very rich woman. But Bravo is an exception to those business leaders whose summer dreams of personal fortunes have been dashed by plunging stock markets in the past 10 days.

Telephone directories group Yell, DIY retailer Focus Wickes and Irish drinks and snacks company C&C have abandoned plans to float on the London Stock Exchange this month. Each blamed turbulence in equity markets after failing to tempt investors to buy their shares, despite all three companies being 'priced to go'.

Instead of the champagne celebrations that normally follow investor roadshows, analysts' meetings and Press launches, the bosses, backers and bankers have returned to their offices emptyhanded.

The cancellation of the offerings, which would have had a capitalisation of around £4bn, has also deprived City advisers and underwriters of some £77m in fees and hit the venture capitalists who were looking to cash in their investments.

Biggest loser so far is Bill Archer, 58-year-old boss of Focus Wickes. Stock market status would have harvested him around £39m. Archer intended to sell about 15m of his 55m shares in the company he started in 1987, after paying £1m for the six-store DIY chain Choice. Had the float gone ahead, his remaining stake would have been worth about £100m. Archer's deputy and finance director Geoff Wilson was planning to sell just under 2.5m shares, netting him some £6m.

Just hours after Focus Wickes gave up the present battle for public status, Yell also admitted defeat. If things had gone to plan, 52-year-old Yell boss John Condron would have been sitting on a stake worth £15m. His finance director John Davis would have enjoyed the summer a little bit more too, knowing his stake was worth around £6m. Even the comparatively modest £1000-a-head that Yell's 5500 staff were to average would have made up for the rain.

C& C chairman Tony O'Brien was expecting to sell 258,000 shares in this week's aborted float. At the mid price of e3.1, this would have banked him e800,000. His remaining 0.8% would have been worth £5.7m. Chief executive Maurice Pratt's 0.4% stake would have been valued at £2.84m.

But Bravo looks to have secured the best deal. If Burberry floats at the top end of the range, her 1% stake would be worth £14.5m. If the shares fail to live up to expectations she can waive her stake for £10m cash. And if the float is pulled, her £1m salary should keep her going until the market is deemed more favourable.

Advisers wave goodbye to fat fees and bonuses

ACROSS the City, dozens of bankers, lawyers and accountants were expecting to bank fat fees from the floats that would have in turn fuelled hefty bonuses for the stars who worked on the deals.

Goldman Sachs stood to gain more than any other City bank as it had won the most instructions. It was joint global co-ordinator and joint bookrunner with Merrill Lynch and JP Morgan on Yell's £2bn float. Fees for this deal were £33m including an estimated £22.5m of underwriting commission.

It was also joint global coordinator and bookrunner on the £1bn Focus Wickes offering, for which the fees to advisers were £20m, and shared the role with Schroder Salomon Smith Barney on the £700m offering for Irish drinks group C&C. The latter, which on Monday abandoned its plans, had been due to pay e30m (£20m) to banks, accountants and lawyers. It is not known how much Goldmans or the other advisers will now get for their work thus far.

The only consolation for Goldmans is its junior role as one of three global co-ordinators on the £100m Investec listing, which will earn the bank £3.7m. Merrills and Morgan Stanley will share £10.2m underwriting fees if Burberry goes ahead.

• By Sarah Marks

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