* Books had been reported 90 pct covered
* Saint-Gobain had sought up to 958 mln euros from IPO
* Order books due to close on Monday (Adds additional background, comment)
By Christian Plumb and Kylie MacLellan
PARIS/LONDON, June 20 (Reuters) - French construction materials maker Saint-Gobain (SGOB.PA) on Monday postponed indefinitely the initial public offering of glass container unit Verallia, the latest sign of ailing demand for European stock flotations.
Saint-Gobain, which had hoped to raise up to 958 million euros ($1.36 billion) from the spinoff, cited an “underlying level of market uncertainty and volatility.”
The decision to pull the IPO is a defeat for Saint-Gobain, for which the withdrawal is the latest in a series of failed attempts to sell or spin off the unit, as well as a setback for the European IPO market.
More than 15 European IPO deals have been pulled this year and many which have managed to float their shares have seen poor aftermarket performance, leading jaded investors to demand greater discounts to take part in new offerings.
Also pulling its IPO on Monday was Dutch firm Agendia, which markets breast cancer tests. [nLDE75J1IF]
A source close to the Verallia deal earlier had told Reuters that the books on the offering had not been covered when they closed, often a sign that an IPO will have to be withdrawn or repriced.
Those close to the deal have said a cut in profit outlook by Verallia’s main listed peer Owens-Illinois Inc (OI.N) last week had hurt sentiment among investors considering taking part. The profit warning sent shares in the world’s largest glass bottle maker down 6 percent. [ID:nL3E7HF21M] [ID:nLDE75F1UC]
In addition, investors grew increasingly risk-adverse on Monday after delays on a final agreement on a Greek bailout, sending European stock indexes lower and volatility indexes higher.
One banker, speaking not for attribution said the Verallia failure was likely to have a chilling effect on any other companies contemplating an IPO in the short-term.
“People are going to take a vacation,” he said.
Earlier, sources had told Reuters that Saint-Gobain -- which had aimed to shed the unit to focus on its home and construction products -- had received enough orders for 90 percent of the shares it was offering.
Saint-Gobain, had set an indicative price range of 29.50-36.00 euros per share for the Paris listing of a 40 percent stake in Verallia. [ID:nLDE75606Y]
The failure to get enough investor interest is notable since Verallia had been priced to sell -- at 9 to 17 percent discount to Owens-Illinois in terms of 2011 EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation).
Saint-Gobain shares are down 6.1 percent since June 7 when the construction materials company set the range for the IPO, compared with a 1.9 percent drop in France's benchmark Cac40 index .FCHI.
Saint-Gobain, which has a market cap of 22 billion euros, insisted in the statement announcing the IPOs postponement that Verallia’s outlook was “favorable.”
The move to pull the IPO will likely be bad news for Irish bottler and packaging maker Ardagh Group [ARDGR.UL], which plans to list in the United States as early as the third quarter of this year.
The IPO’s withdrawal was first reported by French newspaper Le Figaro on its website.
Additional reporting by Julien Ponthus and Lionel Laurent; Editing by Dan Lalor, Gerald E. McCormick and Bernard Orr