Lastminute.com, the online travel agency, yesterday claimed that volatile global stock markets and concerns over the success of the latest clutch of internet companies had forced the company to pitch its value at the lowest end of analysts' expectations.
The price range for the company's float was set at 190p to 230p, giving it a potential value of £316m, following much speculation that it would start out at £400m.
However, grey market pricing by IG Index and Financial Spreads for the stock's debut was already putting it at between 360p to 500p yesterday, which would take the company's value to £750m.
Up to a quarter of Lastminute.com - or about 33m shares - is expected to be offered in the float, raising £62m for investment in marketing, technology, product development and expansion into new markets and suppliers.
The founders of Lastminute, Brent Hoberman and Martha Lane Fox, are expected to hold between 15% and 20% or £63m of the company when it lists on March 21.
"It's really exciting finally getting it on the road," Ms Lane Fox said.
Lastminute is expected to offer 8m shares to small investors with the remaining 25m going to institutions. "We still think it's a pretty good chunk, the amount we are selling off, with the volatility of the market," Ms Lane Fox said. "I think it's an exciting time for any dot.com."
Miles Satiel, an analyst at West LB Panmure, said: "The valuation that seems to be emerging is towards the low end of expectations. Do we believe Lastminute.com has a market dominating position? is a question that doesn't immediately bring about the answer 'yes'. That's what the price is telling us."
He said it was likely that Lastminute.com would list at a premium because of its strong branding.
Other major shareholders in Lastminute.com will include venture capital firm Arts Alliance Advisors and Global Retail Partners.
Mobile phone group Orange will acquire 1.65m shares at the market price while Virgin Atlantic Airways and Lufthansa will each eventually own 4% of the company.
Virgin and Lufthansa have both been granted warrants which can be converted into shares at 37p each if three-year performance targets are met.
The firm published December quarter results which showed turnover growing almost fourfold to £409,000 and gross profits up from £111,000 to £350,000.
