Delta Lloyd Declines After Aviva Raises $1.5 Billion in IPO

By Maud van Gaal and Elisa Martinuzzi

Nov. 3 (Bloomberg) -- Delta Lloyd NV fell as much as 4.8 percent in its first day of trading after Aviva Plc raised 1.02 billion euros ($1.5 billion) selling shares of its Dutch unit during the worst slump for European insurers in eight months.

Delta Lloyd slid as low as 15.23 euros as of 9:25 a.m. in Amsterdam after Aviva, the U.K.’s second-biggest insurer by market value, sold 63.5 million Delta Lloyd shares at 16 euros each, valuing the company at 2.65 billion euros. London-based Aviva had sought 15.50 euros to 19 euros a share in western Europe’s biggest IPO this year.

Delta Lloyd began trading today on NYSE Euronext’s Amsterdam Stock Exchange under the ticker DL after European insurers posted their biggest weekly drop since March on ING Groep NV’s plan to sell its insurance units to win European Union approval for a taxpayer-funded bailout. Aviva slipped as much as 10.6 pence, or 2.7 percent, to 378.5 pence in London.

New York-based Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., Charlotte, North Carolina-based Bank of America Corp.’s Merrill Lynch & Co. unit and Edinburgh-based Royal Bank of Scotland Group Plc managed the IPO.

Delta Lloyd went public after the Dow Jones Stoxx Insurance 600 Index slid 8.2 percent last week, the steepest retreat since March 6, just before global equities began their eight-month surge. The gauge retreated for the sixth time in seven days today, losing as much as 1.9 percent.

ING, AEI

ING, the biggest Dutch financial-services company, sparked last week’s decline after the Amsterdam-based company said it planned to raise 7.5 billion euros in a rights offering and shed its insurance units through IPOs and sales to other firms to garner approval for state aid. ING slipped as much as 21 cents, or 2.4 percent, to 8.65 euros today.

The listing also comes after AEI, the owner of Enron Corp.’s former international energy business, pulled its offering last week amid the worst returns in at least 14 years for American IPOs. Europe’s Stoxx 600 suffered its first monthly drop since June in October after declines in U.S. consumer confidence, personal spending and home sales spurred concern over the durability of the economic rebound.

Delta Lloyd posted a net loss in the three months ended Sept. 30 that led to a loss of more than 100 million euros for the first nine months of the year, the Amsterdam-based company said on Oct. 19. That was the result of a move in the interest- rate curve used to value the insurer’s liabilities, according to the company’s Chief Financial Officer Peter Kok.

Lehman Brothers, PGE

The European IPO market has been slower to recover than the U.S. after New York-based Lehman Brothers Holdings Inc.’s collapse in September 2008 spurred a credit-market freeze. PGE SA, Poland’s largest power group, priced its IPO at 5.97 billion zloty ($2.1 billion) last week, making it the largest in eastern and western Europe this year.

Six western European companies raised capital through IPOs on exchanges in the region since the start of this year, compared with 33 in the U.S., data compiled by Bloomberg show. There were 18 American offerings in the past two months, the most since the period ended January 2008, the data show.

The revival for U.S. IPOs hasn’t coincided with bigger returns. The offerings of American companies since September outperformed the Standard & Poor’s 500 Index by 0.2 percentage point on average in the first month of trading, the worst performance in Bloomberg data going back 14 years. IPOs by U.S. companies have beaten the S&P 500 by an average 21.3 percentage points since 1995, the data show.

Listing Postponed

Investors have shunned the listings of companies laden with debt, forcing bankers last week to postpone the offering by George Town, Cayman Islands-based AEI. The IPO unraveled after Ashmore Group Plc, the London-based fund manager that controls AEI, withdrew when institutional buyers refused to pay the $16-a-share it sought for the deal.

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net; Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net.