In Blow to IPO Market, NPTest Withdraws Sale

The market for initial public stock offerings suffered another blow on Monday when San Jose-based NPTest Inc. withdrew its planned sale.

But real estate company Maguire Properties Inc. of Los Angeles still is expected to price its stock offering after markets close today, according to sources familiar with the deal.

NPTest, a unit of oilfield services firm Schlumberger Ltd., pulled its sale because of what it called “conditions in the securities markets.”

NPTest provides engineering services to the computer chip industry. The company had planned to raised as much as $575 million via an IPO led by brokerage firms Goldman Sachs & Co. and Citigroup.

Parent Schlumberger decided late last year to spin off the business.

Another semiconductor-related company recently went public and was well-received by investors: Livermore, Calif.-based FormFactor Inc., a maker of chip testing tools, sold 6 million shares at $14 each on June 11. The stock rose as high as $21 in the days following the deal. It closed at $17 on Monday on Nasdaq.

Relatively few companies have been able to go public this year despite the stock market’s rebound since mid-March. Many investors have become pickier about new stock deals after dozens of IPOs issued in the boom years of the late 1990s subsequently lost all of their value.

The Maguire Properties deal could test investors’ appetite: The company, a real estate investment trust that owns some major properties in downtown Los Angeles, is expected to sell 36.5 million shares today at $19 to $21 each.

Maguire expects to pay an annual dividend of $1.60 a share. That would give the stock a dividend yield of 8% if the shares are priced at $20 each. An 8% yield would be well above the 6.6% average yield of 139 REITs in an industry index tracked by Bloomberg News.