Apax, Hicks in Yell IPO boost

Shares in the UK directories business have made a strong debut in today’s £1.14bn listing on the London Stock Exchange, enabling its private equity owner to sell a greater stake than originally planned.

Yell Group, the UK directories business controlled by private equity firms Apax Partners and Hicks Muse Tate & Furst, has completed a successful listing on the London Stock Exchange, jumping six per cent at the start of trading. Reuters reported that the offering was five times oversubscribed.

Apax and Hicks Muse opted for a launch price of 285 pence per share, towards the top end of the 250 pence to 300 pence indicative price range. At the opening of trading this morning, Yell was trading above the guide range at 302 pence per share.

Owing to strong institutional appetite for the offering, Apax and Hicks Muse, were able to cash in on a greater volume of shares than had originally been anticipated. Yell increased the size of the offering by £290m to £1.14bn.

As a result, Yell will raise £433m from the sale, while its private equity owners will share £707m from the sale of existing shares in the flotation, instead of £417m as expected, according to Bloomberg. They will also retain shares worth just over £700m at current valuation. Between them, Hicks Muse and Apax invested around £650m in the initial transaction.

The partial realisation is well timed especially for Hicks Muse, which is preparing to raise its second European buyout fund later this year.

There is also an over-allotment arrangement for another 60m shares to be taken by its underwriters, Merrill Lynch and Goldman Sachs, worth an additional £171m.

Following the offer, Apax and Hicks Muse will each hold approximately 19 per cent of Yell's ordinary shares, with management and employees holding around five per cent. Assuming full exercise of the over-allotment arrangements, these holdings would be 15 per cent and five per cent respectively.

A proposed flotation of the business last year was shelved due to difficult market conditions.


Yell has reported strong growth since the business was acquired from British Telecom for £2.14bn in 2001. From 2002 to 2003, Yell’s UK printed directories business achieved a growth rate in turnover of just over six per cent. Turnover has grown from £774m in the 2001 financial year to £1.1bn in 2003. During the same period, EBITDA grew from £234m to £323m.