LONDON (Reuters) - UK holidays-to-insurance company Saga has narrowed the price of its London stock market listing towards the bottom of its original range, despite strong demand.
Saga, which focuses its services on the over-50s, said that its initial public offering (IPO) would be priced at 185-205 pence ($3.12-$3.45) a share, from 185-245 pence previously..
A source familiar with the matter said the company's cautious approach came from its keenness to avoid the share price slide which has plagued companies such as Poundland and Just Eat since their listings this year.
The new guidance gives the company an equity value of 2.03-2.19 billion pounds, said a separate source familiar with the deal, lower than the original price range which valued the company at up to 2.5 billion pounds.
A low price range can indicate a lack of demand from investors. However Saga, which has offered a retail allocation to its loyal base of 2.1 million customers, said it had experienced "exceptional" demand for its retail offering.
"Given our desire to allow customers to play a significant part in the future ownership of the business, we remain very focused on seeking to underpin a positive after-market performance in the stock," said Executive Chairman Andrew Goodsell.
The second source said: "They are very sensitive on how this trades."
On Tuesday, sources told Reuters that the books were covered for Saga's sale of 550 million pounds of new shares by both institutional and retail investors, although the allocation to each has yet to be decided.
There have been indications that interest in European company flotations may be cooling somewhat after a red-hot start to the year, as investors grow more selective. Card Factory shares fell almost 10 percent in their first day of trading after their launch on the London Stock Exchange last week.
(Reporting by Freya Berry; Editing by Clare Hutchison and Pravin Char)