THOMSON Travel shares proved a hit with small investors and institutions alike and they soared to a premium when dealings began.

The price in the offer for sale was set at 170p, the top of the indicative range. The shares hit 215p during the day but closed well off the top at 193.5p.

In response to demand from small investors, the proportion of shares allocated to them was raised from 10% to 17%.

The enlarged retail offer was still over-subscribed, attracting more than 500,000 applicants. They will receive the minimum allocation of 294 shares costing #500 regardless of how many they applied for. Over half put in for more than the minimum.

Private investors were tempted by the chance of getting a 10% discount on Thomson Holidays, as well as considering the company a good investment.

However, Thomson and its share shops have come under fire from private investors for not sending out applications for shares in time for them to meet last Thursday's deadline.

Thomson has now said that unsuccessful applicants will still be granted the holiday discounts if they buy the minimum #500 of shares before the year-end.

The institutional offer was five times over-subscribed. Institutions were allocated 62% of the shares.

Woodbridge, a Thomson family investment company, is taking a stake of over 19%, while more than 5000 Thomson employees also signed up.

Thomson's main Thomson Holidays brand had a 21% share of the package holiday market in 1997, ahead of Airtours with 15% and First Choice on 10%. It also takes in the charter airline Britannia and the 800-strong chain of Lunn Poly travel shops.

Thomson Travel has recently expanded into Scandinavia, paying #260m for Swedish package operator Fritidsresor.

It also owns Ireland's Budget Travel and plans further growth into Continental Europe.

Proceeds from the flotation will be a minimum of #1.25m, a gain to the parent Thomson Corporation of around #813m.