Grudging the fun
A REFUGEE from the Upper Class Twit of the Year Show — yes, the City still employs them — strolled into Lloyds Bank, Bishopsgate, last week with a large bundle of applications for British Airways shares. Too late, he was told: the offer had closed, as advertised, at 10 o'clock. Re- sentment spread slowly across his face. `Oh, dear,' he said. `I wish someone had told me the way.' It took twittishness in that prize-winning category not to qualify for this latest spoonful of public money for jam. The shares were offered (in their partly-paid form) at 65p, and dealings began this week, on the same basis, at a premium of more than 60 per cent. All that the applicants need now is patience. Do not be tempted to sell until the letter arrives, showing how many shares have been allotted to you. Do not be tempted to wait any longer. While you wait, think of the other beneficiaries. Hundreds of thousands of people have the chance to buy something at one price and sell it, at the earliest possible moment, for more than half as much again. Then come their bankers, with their interest and commit- ment fees and handling charges. Then the underwriters, the investing institutions which stood ready to buy the shares if nobody else would, and received more than £5 million for their risk. Brokers to the issue, too, happily sent out application forms round their mailing list, pausing only to stamp their name on them and stand ready to claim their commission. Grudge not the fee paid to the issuing house, Hill Samuel, which finally got this contraption airborne. The world's stock markets, as it happened, took off even faster, and what looked like a cautiously chosen price 65p, rather than 70p — became a certainty. The same thing happened this week in Tokyo. The privatised Nippon Telegraph went to a premium because none of those lucky enough to have been allocated the shares would sell them. It is bound to happen, with fixed-price offers standing exposed to the vagaries of far-from-fixed markets. Banks and others would have competed for the chance to buy the whole British Airways issue from the Govern- ment at a price, undertaking to offer the shares to their customers the following morning for a penny more. That, though, would have spoiled everybody else's fun.
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