UPDATE 1-Italy's Rottapharm pulls plug on flotation in flagging market
* Rottapharm had planned to list 25 pct
* Fincantieri downsized share sale offer in June
* Upcoming Sisal IPO could struggle - bankers (Recasts, adds detail, background, sources)
MILAN, July 10 (Reuters) - Italian pharmaceuticals company Rottapharm Madaus (IPO-ROTT.MI) has pulled plans for a stock market flotation, citing unfavourable market conditions, as Italy's market for new share issues shows signs of flagging.
In a statement on Thursday, Rottapharm said its main owner, the Rovati family's holding company Fidim, had decided to scrap its listing plans because of adverse market conditions and souring investor sentiment towards southern European assets.
A string of Italian companies has tapped into more positive investor sentiment towards southern Europe this year, spurred on by an improved economic outlook and rising equity markets.
But punters are starting to become pickier as markets droop and the amount of stock on offer grows. In June shipmaker Fincantieri downsized its share sale after pricing its stock at the bottom of its price range, while on Sunday the economy minister said the sale of a 40 percent stake in the post office could be delayed.
Bankers said Italian betting company Sisal, whose share sale is set to close on July 14, may also struggle. "There's going to be quite a lot of deal sensitivity. We're at the end of a long period of issues and I think people are just a bit jaded right now," one banker said.
Rottapharm, a global player with a presence in more than 85 countries, had been planning to offer 50 million shares, or 25 percent of its capital, at a price of between 7.25 and 9 euros per share. (Additional reporting by Pamela Barbaglia, Freya Berry and Oleg Vukmanovic; Editing by David Holmes)