Lloyds Share News (LLOY)

By Margot Patrick Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Europe's market for initial public offerings was off to a slow start for the second half, as the approach of the traditional summer lull kept most potential issuers on the sidelines. Existing deals moving through the IPO process in the U.K. were the main focus, particularly online grocer Ocado Group PLC, which set a valuation of between GBP800 million and GBP1.1 billion for its coming float. With an offer price of 200 pence to 275 pence a share for GBP200 million in new shares and around GBP250 million in existing stock, the company has shrugged off analyst concerns that 10 years of unprofitability could be a hindrance. Instead, it is seeking a premium on its shares compared with some other listed retailers, reflecting the confidence of Ocado's executives and bankers that the company will vastly grow its margins and market share in the coming years. Investor meetings with management will continue through next week and the final price will be set late on July 20. Before that, U.K. oil and gas company Fairfield Energy PLC is set to make its debut with an indicative valuation of between $1 billion and $1.1 billion. The company is raising around $500 million to help increase production at its existing oil fields in the North Sea, and for further development and exploration of other North Sea fields it owns. Order books close July 14 and the shares will start conditional dealing the next day. The price range has been set at between 220 pence and 420 pence. Investor interest was also stoked Thursday by news that a team of U.K. businessmen are preparing to float an investment vehicle to buy banking assets. Peter Levene, chairman of Lloyd's of London, the insurance market, will chair the new vehicle while city guru David Walker, who recently led a corporate governance review of the banking sector, will hold a non-executive role. A person familiar with the matter said the new company will be looking to buy retail and small banking businesses, including state-owned assets coming up for sale such as Northern Rock PLC, the nationalized lender, and a 600-strong branch network of Lloyds Banking Group PLC (LYG) that is expected to be put on the block as soon as next year. The aim is to build a credible competitor to the U.K.'s top five retail banks--Lloyds, Royal Bank of Scotland Group PLC (RBS), Barclays PLC (BCS), HSBC Holdings PLC (HBC) and the U.K. unit of Banco Santander SA (STD)--that won't be encumbered by or reliant upon an investment banking arm. Elsewhere, German outdoor advertising agency Stroer Out-of-Home Media AG is due to price its roughly EUR400 million IPO shortly after order books close July 13. Shares are expected to start trading in Frankfurt on July 15. Choppy markets continued to claim victims, though. Earlier Thursday, Prosperity Quest II Ltd., an investment vehicle set up to invest in Russia and other CIS countries, said it won't proceed with its planned listing on Nasdaq OMX, saying most investors had preferred to invest in an unlisted version of the fund instead. German real-estate developer Chamartin Meermann Immobilien AG, called off a planned July 7 IPO in Frankfurt, citing insufficient demand for the stock. It had sought to raise up to EUR63 million in new capital. German construction company Bilfinger Berger AG was also forced to delay a planned IPO of its Australian subsidiary in Sydney, because of market conditions. In Paris, casino operator Groupe Lucien Barriere filed documents to potentially bring an IPO in the autumn, a move that would help 49%-owner Accor SA's (AC.FR) effort to shed non-core assets. Media company Lagardere SCA (MMB.FR) is also pursuing an IPO for its 20% holding in French pay-TV broadcaster Canal Plus France, unless 80% shareholder Vivendi SA (VIV.FR) comes forward with a better offer for the stake. PricewaterhouseCoopers in a report Thursday said European IPO volume remained muted in the second quarter of 2010 compared with the boom years before the financial crisis, but that activity rose for the fifth consecutive quarter. It tracked 89 IPOs on European exchanges in the three months to June 30, worth EUR9 billion, and said that even though investor enthusiasm has been thin, large deals of EUR1 billion-plus are getting through. "Companies gearing up for a potential IPO in the second half of the year will be hoping that, with the traditionally quiet holiday period coming up, the next few months will see some stability return to London and other European markets and produce a more conducive environment for IPOs in the fourth quarter," said Richard Weaver, partner in the capital markets group at PwC. European capital markets are typically closed for business from mid-July to late August, as bankers and investors take their holidays. -By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; margot.patrick@dowjones.com (Marietta Cauchi contributed to this report.) (END) Dow Jones Newswires July 08, 2010 12:02 ET (16:02 GMT)