Enel SpA (ENEL.MI) Thursday said it will consider requests for shares of its renewable energy unit at less than the initial public offer price range, in an effort to attract more investors to Europe's biggest 2010 IPO.

In a statement, Enel said it will consider bids for shares at EUR1.60 each "in order to improve the valuation of such a key asset" as Enel Green Power SpA.

"This decision is expected to enable EGP (Enel Green Power) to achieve a better balance between retail shareholders and institutional investors," it added.

Enel kickstarted 10 days ago the IPO of its renewables unit with a price range of between EUR1.80 and EUR2.10 a share.

Rome-based Enel is selling a stake of up to 32.5% of Enel Green Power for as much as EUR3.41 billion as part of its drive to slash its net debt by the end of the year. A leading fund manager said some investors are put off by Enel's plans to use the funds to reduce debt, rather than to grow the renewable energy business.

Based on EUR1.60 a share, the transaction would raise EUR2.6 billion--less than Enel's stated EUR3 billion target--and would value Enel Green Power at EUR8 billion.

The EUR1.80 a share price values the renewables company at EUR9 billion.

Mediobanca SpA (MB.MI), one of the joint global coordinators, in a note to prospective investors, said it is seeing huge interest after the price cut.

Order books close at 1430 GMT Friday and the shares are to start trading on the Milan and Madrid bourses Nov. 4.

Renewable IPOs are having difficulty attracting investors as the sector loses its shine after governments reign in incentives to slash public debt and as past share sales trade at lower levels.

Thursday, U.S. wind-farm operator First Wind Holdings Inc. said it won't proceed with its IPO a day after cutting its price range.

The valuation of Enel Green Power isn't cheap, although not more expensive than its peers, said Gianmaria Bergantino, a fund manager at Bank Beaufort de Insinger NV in Rome. "What is really worrying investors is that all the [IPO] proceeds will go to reduce Enel's debts, indicating the renewables unit will be subordinated to Enel's needs."

"This makes it less appealing to investors," he added.

Intesa Sanpaolo SpA (ISP.MI), Credit Suisse Group (CS) and Goldman Sachs Group Inc (GS) are also joint global coordinators, while UniCredit SpA (UCG.MI), J.P. Morgan Chase & Co (JPM), Morgan Stanley (MS), Barclays PLC (BCS), Bank of America Corp Lynch (BAC) and Banco Bilbao Vizcaya Argentaria SA (BBVA) are joint bookrunners.

One person close to the transaction said that Enel decided to cut the price range to win over some institutions who felt the initial valuation was too high.

Earlier Thursday, Enel Chairman Piero Gnudi said the outcome of the IPO will be announced after the weekend.

"It doesn't look like the sale was being very successful," said Bergantino of Bank Insinger de Beaufort. He said he isn't planning to request Enel Green Power shares.

Even at the low end of the range, the offer would be the largest IPO this year in Europe, topping Polish insurer PZU SA's roughly EUR2 billion offer in April.

At 1456 GMT, Enel shares rose EUR0.05, or 1.4%, at EUR4.08, slightly higher than Italy's benchmark FTSE Mib Index.

The Enel shares are gaining "as it makes it more likely now that the IPO will be sold out," said an analyst who asked not to be named.

Enel website: http://www.enel.it

-By Margot Patrick and Liam Moloney, Dow Jones Newswires; +44 (0)20 7842 9451; margot.patrick@dowjones.com

(Sabrina Cohen in Milan contributed to this article.)
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