EasyHotel joins float party in £100m move

The “super budget” business, set up by low-cost European airline EasyJet’s founder Sir Stelios Haji-Ioannou, below, said it would seek to raise £60m on the Alternative Investment market.

The firm said it was looking to use cash raised to fund further expansion across Europe.

It currently operates 18 EasyHotels in Europe, including sites in Edinburgh and Glasgow, and two in Dubai and Johannesburg.

The announcement came as shares in another high-profile float, that of over-50s focused holidays-to-insurance group Saga, were priced at the bottom of their expected range in the latest indication of a waning appetite in the City for new stock market flotations.

Conditional trading began with the valuation set at 185p by the offer, which was expected to raise £550m, and put Saga’s market worth at £2.1 billion.

But it was at the lowest end of the 185p-245p price range announced two weeks ago, which would have seen the group valued at up to £2.5bn.

It comes after fashion chain FatFace said on Thursday it had shelved plans to float due to current market conditions.

Saga had indicated earlier this week that the price would be towards the lower end of the expected range to ensure a positive after-market performance, although it said demand from ordinary retail investors had been “exceptional”.

A rash of other flotations has seen Pets at Home, Poundland and electrical appliances online retailer AO come to the stock market in recent weeks, with property chain Zoopla and discount chain B&M planning to join them.

Shares in Saga rose as much as 5 per cent to 195p in early trading but later settled back to close at 185p.

The float saw 50 per cent of the stock on offer allocated to retail investors, a “substantial majority” of them to customers. The group previously said that it had canvassed customers and found around 700,000 would be interested in buying shares.

Institutional investors were allocated the remaining half of the shares. Its private equity owners will hold the majority of the stock.

Saga, which started as an out-of-season holiday provider in 1950, now offers services ranging from cruises and holidays, home and motor insurance, savings and share dealing through to the best-selling Saga Magazine.

It was sold for £1.35bn in a 2004 deal involving management and private equity firm Charterhouse.

Executive chairman Andrew Goodsell said: “We are delighted to have so many of our customers as shareholders and to have a high-quality group of core institutions who we believe will be long-term supporters.

“We have been very pleased with the level of demand for Saga shares from both retail and institutional investors, with the offer subscribed several times over.”