US stagging blamed for MAID volatility
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The roller-coaster ride in MAID's shares continued yesterday after the business information group raised $38.4m in a US share issue.
After opening at 269p, the shares jumped to 290p in early trading but closed 40p lower at 250p. Dealers blamed stagging by American investors, who picked up their shares at the equivalent of 242.2p.
Only a week ago, the shares touched 330p as investors piled into the stock on the back of a potentially lucrative tie-up with Microsoft and the prospect of a Nasdaq listing that would bring the company a stock market quotation in its biggest market and where high-tech stocks are enjoying a massive bull run.
Dan Wagner, chief executive, said: "We have been greatly encouraged by the strong share price performance since announcing our intended US public offering. This has enabled the financing to be secured at a higher price than initially anticipated while still satisfying our goal of greater share liquidity and resulting in lower dilution for existing shareholders." Shareholders who drove the price to its recent peak were badly wrong-footed by a Stock Exchange ruling that forbids a placing of shares at a discount of more than 10 per cent to the prevailing market price. Having announced that it would raise US funds at the equivalent of 240p, the placing could only go ahead if the shares fell to 265p, which they duly did.
MAID said it would continue with the US offer despite this because it thought the potential investor interest in America would mean it could raise more money that way, even at a big discount, than by a rights issue to existing shareholders.
The gyrations in MAID's shares in the past week are the latest chapter in a volatile existence on the market since flotation in March 1994, when an attempt to value a company making just pounds 600,000 profits at pounds 130m was greeted with scepticism. In the end talk of floating at 150p a share was resolved with a placing at 110p, valuing the company at pounds 89m. The City was still not convinced and the shares drifted to a low of 43p in June 1994.
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