Deals May Strain On Refco News;

IPO VIEW-Slumping market weighs on IPOs

By Justin Grant

NEW YORK, June 23 (Reuters) - Choppy market conditions are prompting many companies to either debut shares at lower prices or simply postpone initial public offerings, a trend that analysts say is likely to continue next week.

The U.S. IPO market is expected to close out June with a flurry of activity, as 10 companies are looking to float shares in deals that could be worth up to $1.55 billion, according to data tracker Dealogic.

But in order to make their stocks more appealing, a good portion of the companies may price their shares below forecasts.

"I would be surprised if they all came in range," said Francis Gaskins, president of IPO Desktop, an independent research firm based in Marina Del Rey, California. "These prices were set when the market was higher. It's a normal adjustment."

So far this month, only three of 14 scheduled IPOs priced at or above expectations, according to Dealogic. Nine priced below expectations, and two were postponed.

On Wednesday, Hexion Specialty Chemicals Inc., which expected to raise up to $532 million with its IPO, delayed its stock sale, citing a volatile market.

Also on Wednesday, semiconductor company Techwell Inc. (TWLL.O: Quote, Profile, Research) priced its IPO at $9 a share, below the expected range of $11 to $13.

"Of all the markets, there are two that are most at risk to the events in the broad market -- the IPO calendar and your low-rated high-yield markets," said Larry Wieseneck, co-head of Global Finance at Lehman Brothers, where he helps manage equity and debt underwriting.

"If you look at June, there is no question there could have been more deals that could have been launched ... some people want to delay and move (their IPOs) forward because you want to see the markets stabilize."

The blue chip Dow Jones industrial average <.DJI> and Nasdaq Composite Index <.IXIC> both slipped this week. IPOs in particular are vulnerable to such market moves, analysts said, but strong individual offerings can sometimes weather the storm.

"The ones with good income statements, like J. Crew, will probably make it," Gaskins said. "They have the same-store sales increase. They have a growth plan."

J. CREW IN FOCUS

Growing revenue and strong branding might send shares of clothing retailer J. Crew Group Inc. (JCG.N: Quote, Profile, Research) flying off the rack when they debut next Wednesday, analysts said this week.

The preppy retailer, owned by private equity giant Texas Pacific Group, is set to float 18.8 million shares in an IPO that could be worth up to $346 million. It plans to use the proceeds for general corporate purposes and to pay down debt.

Texas Pacific, which bought the company in 1997, plans to retain a 40 percent stake following the IPO, the filing said. The offering could be the largest retail IPO this year.

"This should be a darling," said Ben Holmes, publisher of Morningnotes.com, an independent research firm based in Boulder, Colorado. "It looks like they've made some moves to clean up their debt structure a little bit. They've managed to grow their revenue, so they're going in the right direction."

New York-based J. Crew said first-quarter revenue jumped to $240 million, up 14 percent from a year earlier, as it continues to rebound from the maladies now plaguing rival Gap Inc. (GPS.N: Quote, Profile, Research) -- merchandise missteps and declining sales despite rapid store growth.

"It's still a very rough company in terms of a turnaround," Holmes said. "It's not complete, but it's definitely an improving situation."

J. Crew began in 1983 as a mail-order business and is known for its casual men's and women's clothing and accessories that it sells in stores, catalogs and online.

"A premier name like that," said IPO analyst David Menlow, "is not going to be a difficult story to sell." (Additional reporting by Joe Giannone and Yung Kim)