UPDATE 1-Fnac priced at 22 euros a share, below some forecasts
* Fnac shares priced at 22 euros, below some forecasts
* Fnac shares expected to fall at opening on Thursday
PARIS, June 19 (Reuters) - Fnac shares were priced at 22 euros a share, valuing the book and CD retailer at 365.1 million euros, market operator NYSE Euronext said on Wednesday, providing a valuation that is likely to disappoint investors.
Fnac shares are due to make their market debut on Thursday as part of parent Kering's decision to spin off the business to focus on luxury and sports brands. Some analysts were expecting a valuation of around 400 million euros ($536 million).
Founded in 1954 by Trotskyites who wanted to make books and music more accessible to the masses, Fnac has been struggling to adapt to the 21st century, hit by music piracy and fierce competition from Internet retailers such as Amazon.
Several analysts and fund managers have said in the past week they expected Fnac shares to fall as investors offloaded the stock they received from Kering.
PPR, which formally changed its name to Kering at its annual general meeting Tuesday, decided to hive off Fnac after having failed to find a buyer for the retail chain which has 170 shops.
To boost investors' confidence in the future company, Kering's family shareholder Artemis has pledged to hold on to its 39 percent stake in Fnac for as long as two years and keep part of that holding thereafter.
Fnac's initial public offering is the second time the company has listed in Paris, having floated on the bourse in 1980 before being taken private by PPR in 1994.
In the past two years, Fnac has been closing underperforming shops. It has also recently widened its product offering to include games, toys and household products.
Fnac sales fell 7 percent in 2011, 2.1 percent in 2012 and 5.3 percent in the first quarter of this year.
Last year, the company's operating profit fell 22 percent at 63.3 million euros, yielding an operating margin of 1.6 percent.