UPDATE 2-Germany's LEG to price shares at 44 euros -sources

Thu Jan 31, 2013 1:16pm EST

* Offer to raise $1.8 bln for selling shareholders

* Price in middle of 41-47 euro/share range

* Germany's second-biggest listing in five years

LONDON/FRANKFURT, Jan 31 (Reuters) - German real estate group LEG priced its stock market flotation at 44 euros per share, sources said on Thursday, raising as much as 1.34 billion euros ($1.8 billion) for its selling shareholders.

That was the middle of its initial indicative price range of 41 euros to 47 euros per share. On Tuesday the company narrowed the range to between 43 and 45 euros a share.

The company, which sources earlier said had received orders for all the shares on offer at the top of that revised range, decided to set the final price at 44 euros per share, two financial markets sources said.

Earlier on Thursday prospective investors were told those with orders below 44 euros would miss out on getting any shares in the sale, Germany's second-biggest listing in five years after Telefonica Deutschland.

LEG's majority owner Whitehall, a Goldman Sachs investment fund, and 11 percent-owner Perry Capital will together bank as much as 1.34 billion euros from selling 57.5 percent of the company's share capital.

Last year's initial public offering (IPO) of Telefonica Deutschland generated proceeds of 1.45 billion euros.

Based on September 2012 figures provided in its offer prospectus, LEG has a net asset value (NAV) of around 44.8 euros per share, making the issue price a 1.8 percent discount to NAV.

That also makes it relatively cheap in comparison to its two closest listed peers in the German residential real estate sector, GSW Immobilien and Deutsche Wohnen, which trade at 4.4 percent and 13 percent premiums respectively to forecast December 2012 NAV, according to JP Morgan.

Europe's IPO market, which has been struggling because of the region's long debt crisis and sluggish economic growth, started to show signs of life in the final months of 2012 as confidence picked up.

While the recovery remains fragile, a lack of IPO activity through much of last year has left a backlog of deals that could come to market in 2013, bankers said.

Ebullient stock markets have already this month encouraged several firms in Europe, including Russian trading venue the Moscow Exchange and British housebuilder Crest Nicholson, to launch plans to float.

LEG plans to buy 10,000 apartments in Germany over the next two years, betting on a market increasingly sought out for its stable returns.

However, LEG will not be issuing any new shares on its listing, so will not reap any proceeds from its debut on the Frankfurt bourse.

LEG, whose listing is being run by Deutsche Bank and Goldman Sachs, is due to make its market debut on Friday.

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