A European-based film company worth more than PolyGram Filmed Entertainment (PFE) was born on Frankfurt's trading floors when Intermedia and Pacifica Co's flotation as Internationalmedia pushed its valuation just shy of Euro 1.4bn ($1.27bn) yesterday morning.

Over-subscribed 14 times, the IPO for the UK, US and German-based company started trading 8.97m shares at euros 35 each. In selling 25% of the company, Internationalmedia raised more than euros 287m before costs were factored in. The share price peaked at Euro 39 each, before settling down to 36.50 at the 2pm press time, creating a notional book value of Euro 1.31bn.

To put that price in perspective, PFE, complete with a vast library and an international distribution infrastructure, could have been snapped up for $1bn or even less.

"Maybe PolyGram was undervalued," agreed Nigel Sinclair, who formed Internationalmedia this year by merging his and Guy East's Intermedia with Moritz Bormann's Pacifica.

About half the investors were from Germany, with the UK the country otherwise most represented. Internationalmedia, which boasts links to host of UK and US producers plus its own catalogue, now has access to roughly $300m in cash, topping up the offering with $80m in cash and assets from Pacifica's German-based International Media Fund (IMF), plus an anticipated $100m from the upcoming IMF2 fund.

"We are keeping the same basic way of operating but we are able to support producers in a stronger way," East said. "We have created a stable structure in which they can make successful films."

Stewart Till, former president of international at PFE, commented: "It does prove that at least 50% of this business is timing."