Motorola has set the price at which it will offer the public share in its chip business, Freescale. But the price, $13, is two-thirds the price it was originally anticipated to be.

The price downgrade follows a cooling of the market toward tech stocks, most notably Merrill Lynch's bearish report on the chip industry issued last week. In that respect, Motorola's timing could have been better.

Motorola should gain at least $1.58bn from the sale, of which it plans to keep $1bn, the rest going to Freescale. However, the fledgling chip company will be able to borrow up to $1.25bn from its soon-to-be former parent.

The $13 price-point is somewhat lower than the $17.50-19.50 Motorola had previously flagged. Such a price would have yielded $2.13-2.37bn - rising to $2.45-2.73bn if 18.2m shares put aside in case the IPO is oversubscribed are sold. Some 121.6m shares make up the initial, Class A allotment.

Motorola will retain the existing, Class B stock, amounting to 92 per cent of the voting stock, before releasing it to its own shareholders later this year. ®

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