Railtrack poser as shares relist

RAILTRACK investors are to be set a conundrum next week when their shares return from suspension on the Stock Exchange at what is likely to be a large discount to the Government-backed offer valuing their shares at around 255p.

Railtrack Group is set to announce a deal, perhaps as early as Monday, valuing the group at nearly £1.3bn. That includes the £500m for the rail operations from the Government's Network Rail company, £375m for its rights to the Channel Tunnel Rail Link and £350m in cash reserves, with the rest made up from non-network property assets.

Railtrack will put out a circular detailing the offer, which will immediately spark the relisting of the shares suspended at 280p last autumn when ex-Transport Secretary Stephen Byers put the network into administration. However, according to grey-market experts, the shares are likely to re-open at below 200p, reflecting ongoing uncertainties about the deal and the fact that shareholders opting to take the 255p offer will not see their cash for several months.

An extraordinary general meeting to ratify the Government offer will be held early in July. Institutions holding the majority of the shares are expected to accept it.