C&C closes at issue price on busy first day of trade

C&C held firm to close at its flotation price of €2.26 on a busy first day of trade in Dublin yesterday. It shed one cent to finish at €2.25 in London.

Dealers said the stock attracted most attention at its issue price, which was at the bottom of the indicative price range.

The ability of the stock to hold its value in a generally weak market was seen as a positive sign, particularly in light of suggestions that the advisers to the flotation had struggled on Thursday to find institutional buyers for all of the stock on offer.

C&C said yesterday morning that the offer had been oversubscribed, describing this as a "strong market endorsement".

"It closed at the issue price, which isn't bad on day one," said one Dublin dealer, remarking that "sighs of relief" were the order of the day on the market.

Another described the performance as "above average" against a backdrop of uncertain markets.

The bulk of yesterday's trade took place in London, where some 18 million C&C shares changed hands. About seven million shares were traded in Dublin

"It wasn't quite as frenetic as you might have expected but nonetheless, there was reasonable volume," said one market-watcher.

Most trade in both markets came at the issue price of €2.26, despite the stock dipping as low as €2.20 in the morning. It reached a high of €2.27 in London but climbed as high as €2.29 at one point in Dublin.

C&C chief executive, Mr Maurice Pratt, proclaimed himself "delighted" with the response to the flotation, "particularly given the volatile market conditions experienced this week".

Mr Pratt said the "strong calibre" of the firm's new shareholder base reflected an understanding of both its business and its prospects. It is believed that about 5 per cent of C&C's shares went to hedge funds, with the remainder taken up by what one observer described as "blue-chip" institutions from both Europe and the US. "We view the prospects of C&C with confidence and are now well positioned to achieve our strategic objectives," Mr Pratt said.

Dealers reported keen interest yesterday from value-driven investment houses that had an eye to an expected dividend yield of at least 5 per cent.

Eircom, which floated in March, attracted investors with a similar offering. The stock has since failed to record a closing price at or above its float price of €1.55.

C&C will continue to trade conditionally until next Wednesday, when it is due to take a full listing in Dublin and London.