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Myer IPO Price Range A$4.00-A$4.20

SYDNEY (Dow Jones)--The price range on the initial public offering of department store chain Myer Group's stock has narrowed to between A$4.00 and A$4.20, at the low end of an initial range of A$3.90-A$4.90, a person familiar with the matter said Thursday.

The Myer deal, Australia's largest public offering in more than two years, is considered a bellwether deal for the market and will set the tone for demand for future IPOs.

TPG Group and Blum Capital own 84.2% of Myer with management and the Myer family also holding stakes. The group had been hoping to raise up to A$2.34 billion from the offering.

Myer, Australia's biggest department store by sales, has said it has seen strong demand from institutional investors.

The institutional part of the Myer deal is expected to close during the trading day Thursday, people familiar with the matter said.

TPG has yet to inform the market of what size stake it will take in the public offering, one person said, adding TPG could decide to take anywhere from 0% to a 20% stake in the department store chain it led a consortium to take private for A$1.4 billion in 2006.

There has been some concern in the market about TPG taking a stake in Myer because it could create an overhang on the stock given the expectation that the private equity firm may decide to sell out at a later date.

The retail offer, which closed earlier this week, will price at the same level as the institutional offer, one person familiar with the matter said.

Last week, management released sales figures to prove it is on track to meet the full-year sales targets laid out in its prospectus.

A spokeswoman for the company said management felt it was important to release figures for the first 12 weeks of the 13-week quarter while retail investors were deciding whether to participate in the offering.

Myer plans to list on the Australian Securities Exchange on Nov. 2.

Myer's major competitor is upmarket department store David Jones Ltd. Australia's two largest retailers are Coles, owned by Wesfarmers Ltd., and Woolworths Ltd.