C&C, the drinks and snacks group, has insisted its planned flotation on the Irish and London stock markets will go ahead next Wednesday. A spokesman said investors were continuing to express strong interest in the shares and its plans remained on track, despite volatile market conditions.The slump in global markets has created a very difficult environment for the imminent flotation. This week, two British companies, Yell and Focus Wickes, abandoned plans to come to the market.
One Dublin analyst suggested C&C had only a 50/50 chance of getting the flotation away and much would depend on the strength of the rebound in world markets in the coming days.
"If it does float, it will be at the bottom end of the range. . . It may hold attraction if the price is right," according to Mr Liam Igoe of Goodbody Stockbrokers.
C&C's senior management team and its advisers are continuing to promote the shares during a series of meetings with large institutional investors in the Republic, Europe and Britain.
It has announced an indicative price range of €2.60 to €3.60. Most analysts suggest the share price will have to be at or close to €2.60 to ensure they are sufficiently attractive to investors.
A large number of Irish institutions are believed to have signalled their intention to buy the shares but the company will be hoping the bulk of the offering will be bought by major international institutions.
Many small investors who lost money on the Eircom flotation are likely to shy away from C&C given the huge losses in share price values in recent months. C&C had indicated that up to 20 per cent of the shares would be offered to retail investors but this could now be scaled back.
Some stockbrokers have said investors wavered about making an application for C&C shares early this week, but applications were trickling back in as markets recovered some ground yesterday.
Small investors have until close of business on Monday to submit an application for the shares. The company will decide on the amount of shares to issue, with any surplus likely to be offered to the institutions.
One market source suggested the institutions will hold back until the last minute before placing firm orders. If stock markets plunge again on Monday, they would re-assess any decision to buy.
C&C suffers from not having an identical peer among already quoted companies. Drinks groups such as Diageo provide the nearest indication of its likely value and ability to withstand volatility. Mr Igoe said the drinks sector withstood the latest downward spiral in share prices reasonably well with shares down overall by just 2 per cent.
C&C comes to the market as a defensive stock that is easily understandable to investors and with a solid track record. But some analysts have pointed to its high debt level, its heavy reliance on its leading Bulmers cider brand and the possible overhang effect of the shares that will be held by venture capital group BC Partner, which are expected to be sold in the future.
