SOFTWARE: Software group Iona Technologies has substantially scaled back its share placing, raising $60 million (€69.3 million) rather than the $110 million suggested when it was first announced five weeks ago.

In January, Iona said it would place five million new shares and, at that time, Iona was trading at $22. Now Iona has reduced the placing to four million shares at $15 each, raising a total of $60 million before the costs of the placing are met. The three underwriters - Lehman, SG Cowen and Prudential - have an option to buy another 600,000 shares at the placing price.

Since the placing was first announced, Iona shares have fallen sharply and this has led three of the Iona founder-directors - Dr Chris Horn, Mr Annrai O'Toole and Mr Sean Baker - to abandon plans to sell 500,000 of their own shares in conjunction with the placing of the new shares.

Merrion analyst Mr John Coolican said Iona's willingness to go ahead with a reduced placing suggested it had no current plans for a sizeable acquisition. He said the $60 million proceeds of the placing would reassure customers about the group's financial strength.

"Iona's software products cost a lot of money and companies want to be sure that the company is going to be around in three years' time. This extra capital will boost customer confidence."

Iona shares fell on the Nasdaq market after the announcement of the placing and by midday in New York they were down 9 per cent at $14.33. Given that the placing of four million shares represents a near 15 per cent dilution, this is seen as a creditable performance by the shares.