VirginMobile float price may sink
Rough waters ahead/stormy seas etc...
The flotation of Virgin Mobile was in question this morning because institutional investors are refusing to back Sir Richard Branson's valuation of the company. The mobile operator was set to float for about £713m but big investors and City analysts are questioning whether Branson is asking too much for the shares.
The shares were predicted to sell for between 235p and 285p, valuing the firm at between £588m and £713m. The firm has taken its roadshow to investors in the US and is waiting to gauge their reaction before setting a final price.
One analyst, Andrew Beale from Arete, quoted in The Times, titled his analyst note "Virgin on the Ridiculous". He thinks 160p is a fair value for the shares - "at the first signs of price competition this is where the shares are headed".
Virgin Mobile were not available to comment on this story. Bearded entrepreneur Richard Branson has had a difficult relationship with the City. He returned Virgin to private ownership after nearly two years as a public company, blaming analysts and short-term investors for the decision. ®