Cruelty to stags
THE CITY'S way of selling shares was designed by the City to suit itself. This unworthy suspicion of mine is reinforced by the grumbling now directed towards S. G. Warburg. In charge of the £6 billion Telecom share sale, Warburgs are using their brains, which may well be a breach of the Issuing Houses Association's rule- book. First, they have abandoned the fixed-price offer for sale, or stag's benefit, which gave the chaps the chance to fire off their applications if they could see an instant profit, but not to shoot until they saw the whites of its eyes. No fixed-price offer means no underwriting, and saves commissions and fees of £40 million — as the Chancellor boasted in Guildhall, get- ting a frigid response from an audience full of underwriters. Now Warburgs have built a defence mechanism into the price, but have arranged that if it goes to a premium the Government will meet the demand by selling more shares — bad for punters, good for buyers. Next comes the push to bring share-buying to the High Street, through the so-called share shops. This has produced a barrage of grumbles from City people who have never sold anything in a street, let alone a share. I am encouraged.
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