OSLO Shares in Norwegian insurer Gjensidige (GJFS.OL) traded below the price of the company's initial public offering to raise some 10.7 billion crowns ($1.77 billion) in Norway's largest flotation in nearly a decade.
Mutually-owned Gjensidige has floated a 40 percent stake including a 3.7 percent over-allotment option. It priced its shares at 59 Norwegian crowns ($9.76), the mid-point of its latest indicated range of 58-60 crowns.
When the Oslo Stock Exchange opened at 0800 GMT on Friday Gjensidige's stock first rose to 59.25 crowns but after 45 minutes had fallen to 58 crowns against a flat Oslo benchmark index.
Several analysts said it was too early to judge the market reaction because many Norwegian retail investors might be flipping IPO shares they purchased at a discount.
"You have all these retail investors that received a 10 percent discount, and I wouldn't be surprised if at least some of them are already taking that as profit," said Fondsfinans analyst Bengt Kirkoen.
The Gjensidige IPO, the largest in Norway since Statoil's (STL.OL) in 2001, values the company at 29.5 billion crowns.
Denmark's TDC (TDC.CO) on Thursday raised $3.7 billion for its private equity owners through a share buyback in one of Europe's biggest public offerings of 2010.
The Norwgian property and casualty insurer's IPO and the share sale by Denmark's TDC (TDC.CO) highlight investor appetite for Scandinavian assets as the region's economies recover, while the neighboring euro zone is rocked by a debt crises.
Investor interest in IPOs has picked up worldwide in the second half of 2010.
Gjensidige's equity -- fully owned by the Gjensidige Foundation before the offering -- had a book value of 22.06 billion crowns at the end of the third quarter. The IPO values it at 1.33 times this amount, a Reuters calculation showed.
Finnish insurer Sampo SAMAS.HE trades at 1.48 times its third-quarter book value, while Denmark's Tryg (TRYG.CO) trades at close to 1.65 times book value.
Some see the Gjensidige IPO as a way for the firm to pursue mergers and acquisitions, perhaps including a tie-up with Norwegian life insurer Storebrand (STB.OL). Gjensidige is Storebrand's largest shareholder, with a 24.3-percent stake.
(Editing by Will Waterman and Jane Merriman)