iTouch valuation reflects positive market response

iTouch, the international provider of mobile phone information services, yesterday set the price range for its stock market flotation, valuing the company at 325 million ($1.07 billion).

The range is 100p-130p ($3.29-$4.28) a share, at the upper end of market expectations. It is thought the price reflects a positive response from institutions during the pre-marketing phase of the offer. Dealings in the shares are expected to start at the end of this month.

Based on the mid-price of 115p a share, the institutional placing will raise abouth 70 million after expenses. The proceeds of the offer will be used to finance the development of iTouch's operations in its existing countries and develop other international markets.

Following the float, Independent News & Media, parent company of the Independent and Independent on Sunday newspapers, will hold 50 per cent of the shares in iTouch (from 66.7 per cent).

The co-founders, Avi Azulai and Wayne Pitout, will hold 20.8 per cent, while APN Digital will hold 4.1 per cent.

iTouch was set up in South Africa and has expanded its Wireless Application Protocol (Wap) mobile services in Britain, New Zealand and Ireland. Launches are now planned for Australia and Israel. Its mobile portal provides news and a range of business, sports and entertainment guides.

There had been speculation the initial public offering might be delayed following the turbulence in technology stocks in recent months.

However, Ivan Fallon, iTouch's non-executive chairman, said: "We were always heading for July.

"We weren't ready to go when the market wobbles came. We're happy to go at this point."

iTouch is not expected to move into profit before 2002. The company recorded revenues of 2.1 million last year, although banking sources said the figure did not reflect the present business, following several initiatives in recent months.

The company points to strong potential from the rapid growth in the number of mobile-phone users internationally and the convergence between mobile devices and the internet.

"We are rapidly rolling out our business model, having launched Wap portals in South Africa, Ireland, the UK and New Zealand," Mr Fallon said, "and we are pleased to be able to keep iTouch positioned at the forefront of mobile communications."

US investment bank Merrill Lynch will be the sponsor, global coordinator and bookrunner of the global offer. Davy Stockbrokers, of Ireland, and WestLB Panmure will act as co-lead managers.

- INDEPENDENT