ROYAL IMTECH 
By Private equity firm CVC
Shares in bpost - which dominates mail delivery in Belgium - rose 2 percent to 14.79 euros by 11:05 a.m. British time. The stock was priced at 14.50 euros, the top end of its 12.50 to 15 euro range.
The initial public offering (IPO) is being closely watched by Britain, which plans to sell state-owned postal group Royal Mail this financial year in what could be the country's biggest privatisation in 20 years.
"It will be very reassuring to see a mail business come with such a strong performance and price towards the top of the range. That bodes well, but they are going to have some different issues," said one person familiar with the matter.
"Royal Mail is at a very different stage. Bpost has gone through years of restructuring ... Royal Mail is going to have to be positioned quite differently to bpost," he said.
Since 2011, bpost has increased automation in its sorting operations and cut the number of distribution centres as part of a restructuring drive. Just over a third of its staff are over 50 years old, and it has said it plans to reduce its headcount by natural attrition over the next few years.
Bpost said 20.7 percent of the offering, the largest flotation in Belgium since the 2007 listing of zinc smelter Nyrstar (>> NYRSTAR), was sold to retail investors in Belgium. And, unusually for a European offering, about 10 percent went to retail investors in Japan.
Postal workers were sold 924,000 shares.
Retail investors tend to prefer high-yielding, relatively stable stocks, and well-known companies.
Bpost plans to pay a dividend of at least 85 percent of net profit, implying a 7 percent yield on its 2012 earnings, more than the 5.8 percent figure for its nearest peer Oesterreichische Post (>> Oesterreichische Post AG).
At 14.50 euros a share, bpost is valued at 16.7 times 2012 earnings, compared to about 17 times for Oesterreichische Post.
Europe has seen an increase in new listings activity this year thanks to improving investor sentiment but volatility has begun to creep back into the market, with shares falling across the globe on Thursday on the prospect of reduced U.S. monetary stimulus and further signs of sluggish Chinese economic growth.
That did not stop heart drug specialist Cardio3 BioSciences launching its Brussels and Paris IPO on Thursday.
But, on Friday, Casino owner Macau Legend Development Ltd <1680.HK> postponed an up to $786 million (507 million pounds) Hong Kong IPO.
CVC, which bought into bpost in 2006, reduced its stake to 21.54 percent through the offering. This will fall to 17.34 percent if an over-allotment option is exercised.
Belgium will retain its controlling stake of 50.01 percent.
In Belgium, domestic mail volume fell 2.5 percent per year on average between 2008 and 2012, although this is a slower decline than in most other European countries.
Like other postal operators, bpost's main challenge is how to compensate declining letter volumes by increasing its share in a parcel market buoyed by online shopping. Parcel services are dominated by rivals such as DHL, TNT, and UPS.
Bpost made 85 percent of its income last year from domestic mail and just 14 percent from parcels and international post.
JP Morgan, Nomura and BNP Paribas were joint global coordinators on the offering, while JP Morgan, Nomura, Morgan Stanley and UBS were the international bookrunners.
(Additional reporting by Robert-Jan Bartunek and Ben Deighton in Brussels and Kylie MacLellan in London)
By Philip Blenkinsop
