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Problem child Yell makes the big time

Issuer: Yell Group
Amount: £1.14 billion
Launched: July 1 2003
Bookrunners: Merrill Lynch and Goldman Sachs

Last month, Apax Partners and Hicks, Muse, Tate & Furst finally managed to send their problem child Yell to market. After fishing around for a few days bookrunners Merrill Lynch and Goldman Sachs found there were plenty of institutional investors interested in the UK telephone directory provider's stock and launched the IPO on July 1.

The initial deal size was £850 million but investor demand took this to £1.14 billion ($1.8 billion), plus the greenshoe. Around 38% came from new shares and 62% from secondary shares. The deal was priced in the top half of the 250p to 300p range at 285p in just 10 days, rather than the usual six weeks. The bookrunners were able to accomplish this because investors were already familiar with Yell from last year's failed attempt to take the company public.

While the Merrill and Goldman bankers were working on the flotation, bankers at ABN Amro and HSBC were putting together a £1.2 billion refinancing loan for Yell. The previous banking facilities were leveraged buy-out structured loans put in place in 2001 when Hicks, Muse and Apax Partners bought the company.

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