UK furniture retailer DFS makes muted market debut

LONDON, March 6 (Reuters) - British furniture retailer DFS made a muted debut on London's Stock Exchange on Friday, with its shares rising only slightly above an offer price of 255 pence.

The company's shares rose 5 percent initially, but retreated and were up 1.4 percent at 258p by 0907 GMT, valuing the company at about 550 million pounds ($837 million). The 255 pence price tag, announced on Friday, was at the bottom end of a 245p-310p range.

"It is hard to spin today's news that the IPO (initial public offering) has been priced at only 255p as a success," independent retail analyst Nick Bubb said.

"Investors are clearly nervous about DFS's prospects after the (May general) election," referring to predictions that there will be no clear winner of the vote, which could hit consumer confidence.

DFS, which is majority-owned by private equity firm Advent International, has a quarter share of Britain's 3 billion pound upholstered furniture market. It has 105 stores in the UK, Ireland (Other OTC: IRLD - news) and the Netherlands, mainly on retail parks.

In the year to Nov. 1, 2014 the group posted adjusted core earnings of 85.2 million pounds. It will post interim 2015 results on March 26.

The group said the offer, which represented 38 percent of DFS's share capital, had raised gross proceeds of 98 million pounds, which would be used to reduce debt.

($1 = 0.6572 pounds) (Reporting by Neil Maidment. Editing by Jane Merriman)