Betfair prospectus out this week

The much anticipated public flotation of ten percent of internet gambling group Betfair will take an important step forward with the issue this week of the prospectus, setting out the number of shares that will be made available and at what price.
The Financial Sunday Express reports that investors can expect to get their hands on the document Thursday, with speculation currently predicting a valuation of around GBP 1.2 billion…somewhat less than original media estimates of GBP 1.5 billion
The newspaper reports that Betfair may have to cut the price of its flotation as institutional investors fear the betting company has been overvalued by its bankers – Goldman Sachs, Morgan Stanley, Barclays Capital and Numis.
Commenting ahead of the prospectus’s publication, several institutional investors told the Financial Sunday Express they fear the Betfair IPO will be similar to the debacle that was Ocado’s flotation, where the firm had to chop its proposal from GBP 1 billion to GBP 800 million after investors threatened to snub the share offering on valuation grounds.
The head of one City investment group said: “The Betfair story is quite good: people are comfortable with it. The danger is that it gets an exaggerated valuation. Some people have been put off the IPO as they believe Goldman will overvalue it.”

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