CAMPAIGNS: Wolfson's IPO hits top price with savvy PR - Financial PR

Client: Wolfson Microelectronics PR Team: In-house/Brunswick Campaign: IPO on the London Stock Exchange Timescale: August-October 2003 Budget: understood to be five figures

Listed technology companies have taken quite a hammering over the past three years, with investors taking fright in the wake of the dotcom crash.

During the same period, stock market turmoil has led many entrepreneurs to put flotation plans on ice.

So when Scottish technology company Wolfson Micro-electronics - a profitable business with more than 150 customers worldwide - decided to come to market, in what would prove to be the largest technology IPO on the London Stock Exchange (LSE) for three years, it was plain that the move would attract attention.

'We had to cope with the fact that there would be a lot of interest in this,' says Brunswick partner Tom Buchanan. 'People wanted to know what this would mean for the tech market, and who'd be next.'

Objectives

To explain the technology to the investment community in layman's terms, but in a manner that did not underplay the sophistication of Wolfson's products. To distinguish the company from some of the less financially sound hi-tech companies that investors had backed during the boom years before being brought down to earth with a bump. To achieve an offer price at the top end of the pricing range - Citigroup was sponsor of the offer.

Strategy and Plan

News of Wolfson's intention to float was leaked to the Mail on Sunday, putting the PR team on the defensive early on, as it had to respond with the dreaded 'no comment' ahead of the official announcement.

But on 8 September the intention to list on the LSE by the end of 2003 was made public and communications could begin in earnest.

Brunswick worked with the Wolfson management team, to make sure the agency was comfortable with what it could and could not say to the media and prospective investors. The PR team was briefed to stick to the points outlined in the offer prospectus.

A fundamental message was that the listing would give Wolfson the platform the firm needed to further expand its business in order to meet customer needs.

Creative product photography and a photocall with senior managers gave picture editors something to work with, and Brunswick made sure that the financial media were kept up to speed on what was being said to fund managers.

Smooth passage of the financial PR programme was disrupted on 9 October, when Texas-based rival Cirrus Logic announced it was filing a patent infringement lawsuit against Wolfson in relation to 15 of its digital-to-analogue converters.

The PR team responded by making it clear that although the legal action was being taken seriously, it would not materially affect the company.

Measurement and Evaluation

Coverage on the business pages of the nationals was overwhelmingly favourable.

In September, The Daily Telegraph ran a positive piece that began with the standfirst: 'At last, a technology success story as rapid growth and pre-tax profits pave the way for a seriously lucrative float.' After trading began, under the headline 'Wolfson makes chips appetising', the Investment column of The Independent gushed 'there is much to recommend this young company with excellent prospects.' In Scotland, The Herald focused on the 'handsome windfall' enjoyed by local backers of Wolfson.

Results

The offer was 'significantly' oversubscribed when Wolfson co-founder and CEO David Milne and chief technology officer Jim Reid announced it was priced at the top of its range at 210p. Shares began trading at 275p, before settling down to 246p at the end of the opening day.

'There were many people who wanted this float to go through,' says Buchanan.

'There was a sense that this was the start for an improvement in technology generally.'

The Times technology correspondent Dan Sabbagh says it was evident from the outset of the campaign that there would be buyers willing to pay a healthy price for the stock.

'(The PR team) had a robust story to tell that really told itself,' he said. 'The company is profitable, with attractive technology, and it was clear the float would interest the City.'

The Herald City editor Karl West said he appreciated the honesty of the communications team, especially when unexpected events threatened to upset the float. 'They had a last-minute hitch with the legal row with Cirrus, and I thought they handled it quite well,' West said. 'They kept the momentum going and kept the market informed. The lawsuit could have derailed the whole thing, but they played it straight with the market and the market rewarded them.'

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