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T-Online puts IPO to the ballot

Avoids Lastminute.com error

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T-Online's chairman, Wolfgang Keuntje, told German business television channel n-tv that he has not excluded the possibility of offering shares in his company via a lottery. The details of how it would work are not clear yet, he told n-tv, but the demand is so high that a traditional quotation is just not possible. T-Online, the number one ISP in Germany with seven million subscribers, is a fully owned subsidiary of Deutsche Telekom. AOL Germany is number two. About 21 per cent of 28 million German households have an Internet connection. The bookbuilding will run from 3 April to 12 April, with First Notice on 17 April. Only ten per cent of T-Online's capital will be floated - about 100 million shares. T-Online will price its IPO conservatively, according to Keunte. He would prefer to have a positive market debut than "end up seeing the stock fall in the first days after issuance", the FT reports. But generous pricing will stoke up demand even further. The lottery idea will be necessary if the demand for shares of T-Online are as mad as the demand was for Infineon, the Siemens semiconductor unit spin-off. Infineon was 33 times oversubscribed in the days leading up to its market debut. Raising E6 billion ($5.82 billion), it was the biggest IPO in the country since Deutsche Telekom. The former monopoly-holder's IPO in November 1996 raised E13.19 billion ($12.8 billion). Lastminute.com's recent IPO left many retail investors dissatisfied. In an attempt to keep everyone happy, the company sold shares to everyone who applied - all 200,000 of them. Unfortunately, each new shareholder was left with just 35 shares apiece, worth under £150 at IPO day, too few to make a profit (once dealing costs are taken into account). This week, with the beginning of official trading in Lastminute stock, has seen an exodus of disgruntled retail investors - and a big fall in the company's share price. Lastminute's share price rallied yesterday to close up 19.5p at 307.5p, well underneath its 380p IPO price. ®

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