QINETIQ, the Government’s first privatisation since coming to power, is expected to price at the top end of its estimated range, analysts said last night.
Conditional dealing in the technology and research company starts today, with dealers pointing to a price of between 195p and 205p.
QinetiQ set a price band of 165p to 205p in its prospectus last month but dealers said that the controversial flotation had attracted a lot of interest. At the higher of these values, QinetiQ, which was formed from part of the Ministry of Defence’s research agency, would be valued at about £1.3 billion.
The flotation will make fortunes for Carlyle, the private equity group that bought a 34 per cent stake in QinetiQ for £42 million in 2003, and for QinetiQ’s senior management.
The grey market spread for the debut was 216p to 223p yesterday.
Advertisement
Lord Drayson, the Defence Procurement Minister, defended the Government’s decision not to offer the shares to retail investors. “Our advice was that sending out a retail prospectus, setting up the back-up and an advertising campaign would have cost us about £23 million and for no benefit,” he said.
“My job was to make sure that all taxpayers benefited not just some. It wasn’t in the interests of the taxpayer to offer it to small shareholders.”
After the float the Government will be left with a 23.7 per cent stake in the group. Lord Drayson said that there was no plan to dispose of that stake.