British Energy (Hansard, 15 July 1996)

§ Mr. Lang

I am pleased to report that the Government's UK public offer and international offer of shares in British Energy plc were successfully completed this morning, when dealings in interim rights started on the London stock exchange.

As a result of bids received in the international offer, the prices of the second instalments for all investors in the UK public offer and the international offer were set at 98p per interim right.

365W

Accordingly, the price for British Energy interim rights purchased in the United Kingdom public offer was 198p per share, comprising 100p paid on successful application and 98p to be paid by 16 September 1997.

The price for interim rights purchased in the international offer of British Energy shares was 203p per share, comprising 105p paid on successful application and 98p to be paid by 16 September 1997.

The Government offered for sale up to 610 million British Energy shares in the UK public offer and the international offer.

Some 600,000 applications were received in the United Kingdom public offer for a total of some 443 million shares. This represented about 2.4 times the shares initially expected to be sold in the UK public offer. In response to this demand, the Government increased the total number of shares allocated to the UK public offer to 260 million shares—some 43 per cent. of the shares offered. At this level, the number of shares applied for in the UK public offer represented some 1.7 times the shares available.

Almost 98 per cent. of applicants in the UK public offer received an allocation of shares; 41 per cent. of all applicants had their applications met in full.

Some 6,300 employees—about 94 per cent.—of the British Energy group applied for shares in their company. In addition 1,000 employees—about 24 per cent.—of Magnox Electric applied for shares. All employee and pensioner applications were met in full.

Excluding the retail tender, 295 million shares were allocated to bidders in the international offer. This number does not include any shares that BZW Securities Ltd. may have over-allocated in connection with the international offer. The extent of any such over-allotment will not be disclosed until later. As already announced, BZW Securities Ltd. may also effect stabilisation transactions. Excluding the retail tender, bids covered the minimum number of shares expected to be sold in the international offer about 2.4 times.

Individual investors bidding in the United Kingdom retail tender bid for some 72 million shares. Of this number, some 41 million shares were in respect of PEP applications. All PEP applications in the retail tender were met in full.

In addition to the shares sold in the UK public offer and the international offer, BZW Securities Ltd., as global co-ordinators for the sale, holds an option to acquire from the President of the Board of Trade up to a further 90 million British Energy shares for the purpose of meeting any over-allotment made by it in connection with the international offer. This option must be exercised by 14 August 1996.

Total gross proceeds from the privatisation, including debt and assuming the exercise in full of the option held by the global co-ordinators, amount to about £1,993 million, of which some £716 million of equity proceeds is expected to be received in this financial year.

Following the offers, and assuming the exercise in full of the option over British Energy shares granted by the President of the Board of Trade to BZW Securities Ltd., Her Majesty's Government expect to hold not more than 366W 1 per cent. of the issued share capital of British Energy plc. This amount comprises principally shares that may be needed to meet share bonus entitlements under the UK public offer.