- guardian.co.uk, Saturday September 4 1999 15.04 BST
Online auctioneer QXL.com is likely to float at about half the £750m initial valuation made by analysts and pundits.
Research from the four investment banks appointed to handle the float is thought to value the business at between £250m and £360m, with advisers hoping strong demand will see QXL.com actually floated at nearer £400m.
Tim Jackson, the former journalist who founded the company, is likely to be worth about £100m when QXL.com goes to market.
Analysts said that the unexpectedly low valuation is likely to have been prompted by recent sharp fluctuations in the value of internet stocks in the United States, along with increased selectivity among investors and growing European competition between online auction operators.
QXL and its advisors refused to comment on the businesses valuation. However, a source close to QXL.com insisted the original £750m valuation had been "pure speculation" and regulations had prevented the company from correcting it.
The float will see new shares making up around 25% of the enlarged group sold on the London stock exchange and Nasdaq in the US within two months. Credit Suisse First Boston will follow its successful flotation of Freeserve by acting as the book runner and sponsor of the offering, with assistance from a syndicate comprising SG Cowen, Warburg Dillon Read and BancBoston Robertson Stephens.
Analysts said the unsettled US market and new entrants in the European online auction market may have contributed to a re-evaluation of QXL.com, but Europe's leading online auction house nevertheless remained a fundamentally strong business.
