LONDON (Reuters) - Standard Life, under pressure from falling equity markets, has cut the price range for its July share listing by about 10 percent, but the insurer said on Thursday it still expects to attract strong demand.

Standard Life <SL.UL>, whose members voted last month to end 80 years of mutual ownership, said it expected to price its initial public offer at 210-270 pence a share, valuing it at 4.35 billion to 5.25 billion pounds.

That level would propel Europe's largest mutual life insurer into the FTSE 100 index <.FTSE> and make it the fifth-largest UK-listed assurer.

"We have had hundreds of contacts with investors, investment banks in the last couple of weeks and we have real confidence this IPO will be done within the range," Standard Life's Chief Executive Sandy Crombie said. "One could always hope for better markets but you never know when they will arrive."

The April range of 240-290 pence per share, which valued the company at up to 5.5 billion pounds, was set to reflect Standard Life's value at that time, had it been quoted.

Since then the FTSE 100 has dropped around 9 percent, while life insurance stocks have fallen 15 percent.

The Edinburgh-based insurer, which aims to raise 1.1 billion pounds of net new capital, has denied that falling markets could push it to shelve the IPO. Executives said a strong vote from members backed their course of action.

"Members voted 98 percent to 2 percent to go (public) so there was a very clear indication," Chairman Brian Stewart told Reuters. "Investors don't just look at today, they look at tomorrow. And the indications from investors is that they are incredibly confident of where Standard Life will go tomorrow."

LOOKING CHEAP?

Standard Life, battered by the stock market bear years in 2000 to 2003, has come a long way since then, swinging to profit in 2005 from steep losses the previous year as it capitalises on a strong brand and focuses on higher-margin products. But analysts said it could still face a rough ride on its debut.

Financial spreadbetters IG Index and Cantor Index have set a grey market range for the shares of 217-225 pence and 210-220 pence respectively -- towards the bottom of the price bracket.

"I'm not finding a huge amount of people saying this is absolutely one we've got to have. They're saying we'll look at it and see what price it comes at," analyst Roman Cizdyn at Oriel Securities said.

"If you want a UK-biased life company you've already got Legal & General and Friends Provident, both of which are cheap."

At the middle of Thursday's range and before proceeds from the IPO, Standard Life would be listing at close to its embedded value -- an industry measure of worth that includes the net present value of estimated future profits -- which stood at 3.744 billion pounds at the end of 2005.

That would be below average sector multiples but close to the valuation of its nearest peer, Friends Provident <FP.L>, which trades at the lower end of the sector, around 1-1.38 times EV. Legal & General <LGEN.L> trades at around 1.1 times EV.

"This price would leave it vulnerable to a bidder if there was an obvious bidder," said Bob Yates, head of European research at Fox-Pitt, Kelton. "I don't know there is an obvious bidder for Standard Life, however. But if one existed then this price range would flush them out."

Sources close to the deal said earlier this year that smaller rival Resolution <RSL.L> had made an approach for Standard Life, but it was rejected. Resolution has since bought the life business of mortgage bank Abbey for 3.6 billion pounds.

Standard Life's final pricing will be announced on July 9 after three weeks of roadshows, ahead of a July 10 market debut.

The company said it expected to pay its first dividend of 5.4 pence per share on the second half of 2006 in May 2007. That represents roughly half the total dividend for 2006, or a yield of 4.5 percent at the mid-point of the IPO range.

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By Clara Ferreira-Marques

(Additional reporting by Steve Slater, Simon Challis and Friedel Rother)

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