Wellcome sale faces a tough final week

THE Wellcome share sale enters its crucial week today against a testing background of weak share prices and growing economic worries.

Advisers to Wellcome Trust, the medical research charity, will attempt to drum up demand for pounds 3bn of shares in Wellcome, the drugs company, in the largest ever non-privatisation sale by tender.

Robert Fleming, the global co- ordinator of the sale, is encouraged by the level of demand for shares so far, despite last week's drop in markets round the world.

But institutional investors do not have to make firm bids until the offer closes on Friday, which means they could withdraw, scale down or increase their preliminary bids. Retail investors have to apply by 3.30pm tomorrow, even though the strike price at which shares will be sold will not be set until after the offer closes.

Interest in Wellcome will be highlighted by this week's conference in Amsterdam on Aids. Wellcome, which produces AZT, the only approved monotherapy, is expected to issue research on the beneficial effects of combining AZT with Zovirax, another drug.

The trust is selling 330 million shares, cutting its stake in Wellcome from 73.6 per cent to 38 per cent. But it can increase or decrease the size of the issue depending on demand, subject to retaining a minimum stake of 25 per cent.

Advisers are keen to ensure the shares go to a premium, suggesting they want to leave unsatisfied demand.

Investors are lodging their preliminary bids at about 820p to 850p. If the bids fall below this level, advisers will consider cutting back the size of the issue, it is believed.

The sale comes as a number of flotations - including MFI, The Telegraph, Taunton Cider and Anglian Windows - have flopped. The sale of shares in GPA Group was postponed.

Wellcome's shares closed down 7p at 870p on Friday, falling less sharply than the market. When the issue was launched, they were 915p.