Shares in music, video and book retailer HMV Group have sunk after lukewarm demand for the biggest float in nearly a year forced the firm to rein in the issue price.
The owner of Waterstone's book stores priced its shares at 192p, at the bottom end of its 190p-220p range, raising a net £351 million sterling and giving HMV a market value of £773 million. The stock slipped as low as 184p in brisk trade soon afterwards this morning, then recovered slightly to 187p.
Bankers said the issue was subscribed between 1.5 and two times. They added the price tag reflected the tough market for share offerings.
"The fact that the book was not covered four or five times illustrates how difficult the new issues market remains," HMV's chief executive Mr Alan Giles told Reuters.
The flotation of HMV, named after its trademark image of Nipper the dog listening to 'His Master's Voice' on a gramophone, is the biggest by a British based company since life assurer Friends Provident last July.
It was seen as a key indicator of the market's appetite for new issues which have been in the doldrums for more than a year as the global economy slowed and share prices retreated from their peaks.
The chain operates 325 HMV stores in nine countries and 197 Waterstone's book shops, mainly in Britain and Ireland.