THE A$600 million (about HK$3.2 billion) float of Australia's Seven Network has closed a week early, with institutional investors preparing for cuts of 30 per cent or more in their allocations. The float closed on July 30 instead of August 6 after overwhelming demand. Oversubscription estimates suggest that institutions have asked for shares worth more than $700 million - more than twice what they are to receive - and that total applications have reached $1 billion. The shares, with a $2 issue price, will begin trading on August 12, with brokers forecasting that they will open at $2.40 to $2.60. The news came as the Australian stock exchange's chief economist, Michael Heffernan, revealed research showing that shareholding by individuals had exceeded 30 per cent of market capitalisation, or $60 billion, for the first time. He estimated that household shareholding had increased by $8 billion to $10 billion since the September quarter last year. Announcing the float closure, Seven chairman Ivan Deveson said it would offer 35 per cent, $160 million, to the public, up to $290 million to institutional investors and the rest to the strategic partners News Corp, which holds 10 per cent, and Telecom Australia, 15 per cent. ''We took the decision to close the issue early because it was fully subscribed,'' Mr Deveson said. The lead underwriter, brokerage Ord Minnett, expected to take more than a week to allocate the shares. The Australian Broadcasting Authority is inquiring into the relationship between News and Telecom, which are both members of a pay-TV consortium, and whether they are acting in concert. Cross-media ownership rules prevent a newspaper company exercising control of a television licence covering the same area as its print interests. News is restricted to 15 per cent of Seven by the Broadcasting Act. News Ltd chairman Ken Cowley has appeared before the authority to answer questions about the company's involvement with Seven. The success of the Seven Network float comes after the huge float of the supermarket empire Woolworths, which raised $6.5 billion in applications for $2.4 billion worth of shares. The Australian stock exchange extended its hours to 7.30 pm instead of the normal 4 pm on Monday, July 12, when Woolworths shares began trading. The Federal Treasury has reportedly moved to tap into the wave of share-buying fervour, inviting nine leading underwriters to submit proposals on the sale of 19 per cent of the Commonwealth Bank to follow the float of 29.75 per cent in 1991.
