UPDATE 2-Italy's SEA eyes valuation up to 1.2 bln euros from IPO
* SEA says offering shares at 3.2-4.3 euros each
* Plans to float as much as 23.8 percent of company - source
* Offer to include both new and existing shares - source
MILAN, Nov 16 (Reuters) - Milan airport operator SEA hopes to be valued at as much as 1.2 billion euros ($1.5 billion) on its stock market debut in Milan next month, the company said on Friday.
The initial public offering (IPO) of up to 23.8 percent in the company will see the Province of Milan sell its stake of 34.1 million shares, a source close to the deal said, adding that the listing would also include 24.4 million new shares.
SEA said in a statement on Friday that it had set a price range of 3.2 euros to 4.3 euros each for the shares, making the total size of the offering as much as 252 million euros ($322.36 million). The price range values the company at between 878 million euros and 1.2 billion euros, it said later in the offering prospectus.
The Province of Milan is selling its 14.6 stake to help fund investments it needs to make. The City of Milan, the airport operator's largest shareholder with a 56 percent stake, does not plan to sell any shares.
After months of inactivity, Europe saw a pick-up in share sales in October, with companies including German insurer Talanx , Britain's Direct Line and Telefonica Deutschland successfully completing market debuts.
The market is still far from robust, however, with investors unsettled by a faltering global economy and governments needing to rein in deficits on both sides of the Atlantic.
SEA, which runs the two airports of Malpensa and Linate in Italy's financial capital, plans to set a final price for the listing on December 3 and will make its debut on the Milan market three days later, the source said.
The IPO will also include an over-allotment option of 8.8 million shares.
Infrastructure investment fund F2i, which bought a stake of just under 30 percent in SEA last December when the company was valued at around 1.3 billion euros, has been keen for SEA to float a larger stake, a second source said.
In the first nine months of the year SEA saw a 5.3 percent rise in core earnings to 126.9 million euros, while debt at the end of September amounted to 334.5 million euros.
In the first 10 months of the year the number of passengers at the airports fell 2 percent to around 23.7 million.
Banca IMI, Mediobanca, Morgan Stanley and UniCredit are coordinating the sale, and are bookrunners along with BNP Paribas and Deutsche Bank.
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