FRANKFURT (Reuters) -- Hella, a German manufacturer of auto headlights and electronics, will have a market value of 3.1 billion euros ($3.9 billion) if it sells shares at the top of its target price range in a flotation next week.
Hella, known for high-power headlamps on rally cars, said on Monday that it is offering shares in a 25-to 28-euro ($31 to $35) price range, with its stock scheduled to start trading on Tuesday, Nov. 11.
The share sale comes after Hella placed 11.1 million new shares with institutional investors at 25 euros apiece on Friday, raising 278 million euros for the company.
An additional 5.75 million shares, which are being offered in this week's bookbuilding that closes after only four days on Thursday, come from the holdings of family shareholders.
"Demand is strong, as there are few other IPOs on the market right now," a person familiar with the deal said.
While the amount raised from initial public offerings (IPOs) in Europe quadrupled year-on-year in the first nine months of 2014 to a total $55.5 billion, enthusiasm has cooled in recent weeks due to sliding equity markets.
In Germany, online classifieds group Scout24 and cable group Tele Columbus have postponed planned listings.
"Hella opted for the absolute minimum in transaction risk. The bulk of the shares have already been sold and Hella will list no matter what," the person familiar with the transaction said.
In a similarly structured transaction in 2013, chemicals group Evonik went public after placing shares with investors ahead of the listing.
Hella, whose family owners have vowed to hold on to a shareholding of at least 60 percent until 2024, is planning to use the IPO proceeds to fund international expansion and innovation.
With a free float of 15 percent after the IPO, Hella may qualify for inclusion in Germany's small cap index in March. Its goal of becoming a member of the midcap index , however, would remain out of reach until some family owners sell down shares after a six-month lock-up period.
Hella, which employs 31,000 staff, generated earnings before interest, taxes, depreciation and amortization of 650 million euros in its 2013-14 financial year on sales of 5.34 billion euros.
Bankhaus Lampe and Citigroup are organizing the flotation.