Delta Lloyd offering falls flat as market retreats but Aviva trousers 990m

City A.M. Reporter
DUTCH insurer Delta Lloyd&rsquo;s initial public offering (IPO), western Europe&rsquo;s largest this year, fell flat yesterday amid a retreat in the insurance sector and competing calls on investors&rsquo; cash.<br /><br />The shares, which had been priced at &euro;16 (&pound;14.30) each, at the low end of a forecast range of &euro;15.5 to &euro;19, were trading at &euro;15.48, down 3.3 per cent from their IPO level.<br /><br />Delta Lloyd chief executive Niek Hoek said he had not experienced competition from bank rights issues and was not worried about the stock&rsquo;s fall, saying its investors were focused on long-term returns. <br /><br />He said &ldquo;One of the problems with IPOs is that they tend to happen at the top of the market when a hype is created. That can create disappointment. This is a good level to buy into the shares.&rdquo;<br /><br />Delta Lloyd, the Netherlands&rsquo; fourth-largest life and property insurer based on 2008 gross premium income, had a book value of &euro;22 per share at the end of June, and the books for the IPO were twice oversubscribed, Hoek said.<br /><br />British insurer Aviva will receive net proceeds of about &euro;995m (&pound;890m) from the IPO, based on a minimum 2.5 per cent of IPO fees, and excluding a potential over-allotment option of 6.35m shares.<br /><br />Last month Aviva said it wanted to sell up to 42 per cent of Delta Lloyd shares.