City A.M. Reporter
DUTCH insurer Delta Lloyd’s initial public offering (IPO), western Europe’s largest this year, fell flat yesterday amid a retreat in the insurance sector and competing calls on investors’ cash.<br /><br />The shares, which had been priced at €16 (£14.30) each, at the low end of a forecast range of €15.5 to €19, were trading at €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’s fall, saying its investors were focused on long-term returns. <br /><br />He said “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.”<br /><br />Delta Lloyd, the Netherlands’ fourth-largest life and property insurer based on 2008 gross premium income, had a book value of €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 €995m (£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.