British Gas shares snapped up by small investors

Press, 5 December 1986, Page 11

British Gas shares snapped up by small investors

NZPA correspondent London Queues of prospective British Gas shareholders crowded pavements outside London banks yesterday morning hoping to take part in the world’s biggest privatisation and stock flotation. When the 10 a.m. deadline closed the merchant bank sponsoring the issue, N. M. Rothschild, revealed the £5.6 billion ($l6 billion) British Gas offer had been “substantially oversubscribed”. As many as six million applications for the four billion shares were counted by hastily-staffed counting centres around Britain yesterday. The result out-shines the five million September applications for Trustee Savings Bank sell-off shares, and the half million for British Telecom two years ago.

The Secretary for Energy, Peter Walker, said he was delighted with the public response to the offer, which had been deliberately aimed at the “ordinary” Briton. “I never had a target for the number of shares. What is important is that millions of real people will now own British Gas instead of a politician and a few civil servants,” he told the “London Standard.”

In 1979, only two million people in Britain had ever owned a share, he said. By next «ear the Government woujt have

increased that figure by five-fold. “That’s a very marvellous social and economic change,” he said. The Conservative Government has said the best way to improve nationalised industries’ performances is to expose them to market forces. It intends to continue its privatisation programme by selling British Airways, the Rolls Royce aero company and the British Airports Authority to private investors next year. But most keen investors yesterday were less philosophical; recalling the immediate 100 per cent profit Trustee Savings Bank shareholders made on the day their shares started trading. “I’m doing it simply because I think it will be a solid return,” said lan Robinson, aged 39, as he stood in a queue with his application in hand. “...

Always assuming a Labour Government doesn’t take them back again before I get it, of course.”

The Labour Party has pledged to return all the utility companies to public ownership should it win the next election.

Some of the responsibility for the huge response to the flotation must belong to the American agency which drew up the two-month national advertising campaign. A “Do Tell Sid” catch phrase has bombarded national and regional

newspapers, radio and television stations, billboards and even bus stops since October. Within two weeks of Sid’s “non-appearance,” public awareness of the gas flotation had leapt from less than 50 per cent to over 80 per cent.

“Has Sid been the embodiment of Britain’s greatest-ever advertising campaign?” the “Daily Mail” asked yesterday. That Sid ever happened at all was “a triumph over adversity,” it said. Rules set up by the Stock Exchange over advertising share flotations allow only the information that it is taking place, and information on how to find out more through a prospectus. But the “Sid” campaign evaded the rules by being totally unconnected with what was being put across — British Gas. ’’You keep on thinking about it, wondering how it is connected ...” the newspaper said.

N. M. Rothschild’s managing director, Michael Richardson, said the oversubscription for the gas shares meant a “clawback” system would be activated. Applications from members of the public would be given preference over those by institutions and overseas investors.

Allocation policy will be decided on Sunday and an announcement will be made early on Monday hpfore shares start trad■Jjig on the stock market.