P. M. BRIEFING : British Water Sale Swamped

The government’s $8.3-billion sale of its water industry was 5.7 times oversubscribed, attracting the second highest number of applicants for a British privatization, officials said today.

Demand for shares of the 10 water authorities of England and Wales was strong enough to trigger “claw-back” provisions that will give small investors nearly half the stock instead of the previously planned 27%.

Most investors will get far fewer shares than they asked for in the sale, which totals 5.24 billion pounds. About 2.7 million people made applications, the second highest response ever for a government privatization after the 4.5 million applicants in the British Gas PLC sale.

There had been concern that the sale would be unsuccessful because the stock market has been in the doldrums and the privatization has faced stiff opposition from critics who believed such a vital utility should remain government-owned.