Britains Yes TV Drops IPO Value

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London-Video-on-demand service provider Yes Television Ltd. slashed the share price last week for its upcoming initial public offering by 30 percent to£1.75 ($2.60), valuing the company at £426 million ($635 million).

Yes had previously said shares would bow in the range of £2.25 to £2.75 ($3.35 to $4.10).

Investment bank Robert Fleming & Co. Ltd. said Yes shares should begin exchange trading by the end of May. (Yes is unrelated to Israeli direct-to-home service YES DBS Services Ltd.)

As recently as one month ago, Yes officials said they were confident they could raise about £200 million ($298 million) by selling off 25 percent of the company-a transaction that would value Yes in the £730 million to £890 million ($1.1 billion to $1.3 billion) range.

Soon afterward, technology shares worldwide tanked and, to rub salt into the wound, two of Yes' existing customers-NTL Inc. and Kingston Communications-issued statements placing doubt as to whether Yes could count on them as major clients going forward.

Yes CEO Thomas Kressner appeared to be jockeying in order to prove naysayers wrong.

A transcript of an e-mail message he sent to company staffers found its way onto the Internet last weekend. In the message, he said: "We are now in the driving seat, and the market knows that. We only need some more help with a strong stock market. I can move mountains, but markets will take some time."

"We think the price we are publishing fully reflects the market revaluation taking place; the technology market has declined, and the pricing takes that into account," Yes head of marketing Steve Garvey said.

"There has still been some market turmoil, but we believe there is some stability returning to the market, which is why we have decided to come back with the offer," Garvey added.

Yes plans to sell a minimum of 76.5 million shares, or 24 percent of the firm's equity, raising around £138 million ($206 million).

Yes is getting a boost on news that it signed an agreement with Norwegian telco Telenor A.S. to provide video-on-demand services there.

The company also has the support of two Hollywood players: Time Warner Inc.'s Warner Bros. and The Walt Disney Co.'s Buena Vista International Television Inc hold about 19 percent of Yes.

What's more, British Telecommunications plc continues to test Yes products on its digital-subscriber-line service trials.

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