Thousands of retail investors have subscribed for Aer Lingus shares with an average investment according to some brokers of more than €25,000 each.
Eight stockbrokerages have been dealing with retail investors over the last two weeks since a share price range of €2.10-€2.70 was set. A minimum investment of €10,000 was required in order to participate. At this stage a final price of €2.35-€2.45 is likely although negotiations with institutions are continuing and this could alter.
While a large number of high-net-worth individuals have subscribed for millions of euro worth of shares, the demand from retail investors has been described as twice the level of demand expected, according to sources close to the IPO.
Senior management at the airline are continuing their investment roadshow which hits New York today. All the European capitals were visited over recent days by chief executive Dermot Mannion and two colleagues.
Ronan Reid, joint managing director of Dolmen Securities said brand loyalty had prompted many investors to come forward despite the experience of Eircom. He said the average amount being invested was more than €25,000. He said demand was beyond what anyone had expected, with a late surge on Tuesday and Wednesday in particular.
Denis O'Connor, a partner in stockbroker Campbell O'Connor, said that, while interest was low key initially, there had been strong demand from earlier this week. He said the average amount being invested was €30,000-€50,000. He said that although the majority of funds came from its existing private client base, about 20 per cent of investors were new clients.
NCB declined to comment, but it is understood from market sources that it has received a strong level of subscriptions, from the minimum of €10,000 to much larger amounts. Indications from other stockbrokers were that the number of investors simply subscribing for the minimum €10,000 was smaller than expected.
Another stockbroker, who declined to be named, said there was a lot of money available and very little of it was from Special Savings Incentive Accounts (SSIAs) alone. "The scale of investments from retail investors has surprised everyone. It's been well beyond the kind of money available from SSIAs."
Staff at Aer Lingus have also been using lump sum payments they have recently received to buy shares. The €10,000 minimum limit does not apply to them. The lump sum payments range from €400 to €4,400 depending on how many years of service an employee has.
Staff are entitled to return their lump sum cheque immediately and subscribe for shares. This is in addition to any shares granted to them under the Employee Share Ownership Trust or ESOT.
