Venture capital firms behind the flotation of telephone directory publisher Yell were understood last night to have agreed to sell a third more of their stake in order to meet stronger than expecteddemand from UK and US institutional investors.

The decision will mean that more than pounds 1.1 billion will be raised from the float of about 70 per cent of the company, instead of the pounds 850 million originally envisaged.

The price is expected to be set at 285p per share, between the 250p to 300p price indicated.

At this price Yell will have a pounds 2 billion market capitalisation, sending it straight into the FTSE 100 and making it the largest flotation in London since insurer Friends Provident in July 2001.

Yell, which distributes 92 million directories across the UK and the United States with 3.6 million advertisements, arrives on the market a year after its private equity owners -Apax Partners and Hicks, Muse scrapped plans for a float because of a sharp slide in share prices. The pair acquired the firm from BT two years ago for pounds 2.1 billion.

Recent successful flotations have buoyed optimism for Yell.