CAMPAIGNS: Flotation fever stirred by Axon - Financial PR

Four-year-old IT consultancy Axon turned down nine friendly takeover approaches in 1998, six from US companies. But the e-commerce specialist decided to go it alone and raise new cash by listing on the Stock Exchange.

Four-year-old IT consultancy Axon turned down nine friendly

takeover approaches in 1998, six from US companies. But the e-commerce

specialist decided to go it alone and raise new cash by listing on the

Stock Exchange.



It turned to corporate communications specialist Grandfield to handle

the flotation.



Objectives



To generate financial and analyst support for the flotation when many

commentators had decided IT shares were too expensive. To support the

status of the company in the eyes of clients and employees.



Tactics



Grandfield had four months to prime influential City journalists and

analysts covering the IT sector without blowing the cover on Axon’s

flotation plans.



The agency began by talking to the City’s top IT analysts about Axon in

order to stimulate interest both in the company, especially its

involvement in e-commerce, and general marketplace. Two similar firms -

Druid and Diagonal - were already stock market-listed and had both

witnessed their shares rocket since flotation. Grandfield hoped analysts

would guess that Axon too was being groomed for flotation and be lured

to briefings at a later date.



Formed in chief executive Mark Hunter’s bedroom four years ago, Axon had

grown to sales of pounds 20 million and was set for a stock market value

of around pounds 100 million. Knowing that the outspoken Hunter would be

an interesting person to profile, Grandfield organised an interview with

the 36-year-old for the Sunday Times column ’My First Break’.



On the same day (7 February), the Sunday Times was given the green light

to break news of the flotation. Grandfield issued an ’intention to

float’ press release which was followed up by other nationals on Monday

and Tuesday.



Briefings were arranged for senior trade journalists from Computing,

Computer Weekly and System House. On 16 February, Axon’s pathfinder

prospectus and press release were issued to all nationals, wire services

and the Evening Standard. After a second City briefing, Grandfield made

the written views of broking firms available to the press and provided

access to key analysts.



Pricing the issue on 5 March provided another peg for more press contact

with the company and analysts. First dealings on 11 March saw Grandfield

lobbying market reporters and line journalists for further coverage.



Results



Virtually all the nationals, including the Daily Telegraph, the Daily

Mail, the Express, the Financial Times, the Independent and the Sunday

Times picked up the story when Axon’s pathfinder prospectus was

released.



Post-flotation, Hunter was profiled in the Express and the Observer.



One top IT investment analyst described it as the best presentation he

had seen in the sector for 13 years.



On 5 March, Axon’s stockbroking adviser, WestLB Panmure, said the share

placing with fund managers had been eight times oversubscribed.



Priced at 175p, Axon shares soared to 268p within an hour when they

began trading on 11 March.



Verdict



Grandfield managed to overcome the City’s lack of interest in smaller

companies and its doubts about IT companies - in particular that stocks

were over-valued.



By focusing on Axon’s e-commerce capabilities, the agency successfully

differentiated its client for analysts and journalists who had ’seen it

all before’.



Client: Axon Group plc

PR Team: Grandfield

Campaign: Flotation on the London Stock Exchange

Timescale: October 1998 to March 1999

Budget: Undisclosed



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