PHS launches its float at 414m

WORKPLACE services specialist PHS Group attempted to brave volatile stock market conditions today as it came to market valued at 413.6 million, one of the largest flotations this year.

The price of the shares was almost halved, however, to 80p from an initial range of 110p to 150p.

In partial compensation for the price reduction, Merrill Lynch, which arranged the deal, increased the number of shares in issue from just under 400 million to 517 million.

The shares responded to this innovative scheme by instantly trading at a discount - down 31/2p to 761/2p.

PHS, founded by two brothers in 1963, provides office equipment ranging from soap dispensers to plastic plants.

Sold to Electra in 1995, the company was bought by Charterhouse Development Capital for 215 million in July 1999.

Under the deal, 250 million of new money is being raised and 87 million of existing shares are being sold. CDC will continue to own 11% of PHS and management will also have a stake.

Twelve senior managers, including chief executive Peter Cohen and finance director Keith Bland, are selling shares worth 2.4 million in the float.

Chairman Bob Mackenzie, who is not selling any of his shares, said: "We are thrilled."

Merrill Lynch, which issued a warning on its own profits yesterday, is making 14 million from the deal.

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