* Arcapita pulls P3 London IPO set to price Nov. 1

* All options on table for P3 - company spokeswoman

* Arcapita aimed to raise around 250 mln pounds from listing

(Recasts, adds context, banker quote)

By David French

DUBAI, Nov 1 (Reuters) - Bahrain-based investment firm Arcapita ARCAB.UL has withdrawn a planned London listing of its PointPark Properties (P3) unit, highlighting valuation gaps still exist between sellers and investors despite renewed life in the European IPO market.

After months of inactivity, new share sales on European exchanges have taken place in the last month, with companies including German insurer Talanx TLXGn.DE , Britain's Direct Line DLGD.L and Telefonica Deutschland O2Dn.DE successfully completing market debuts in October.

The market is still far from robust however, with bankers saying the gap in price expectations between buyers and sellers remains wide and investors are still choosy over which companies they are willing to back.

"Investors were positive on the assets the company was buying and the management team in place but the seller's valuation couldn't be achieved," a banking source with knowledge of P3's share sale said.

Developer P3, which has 46 warehouse properties across Europe, had hoped to raise around 250 million pounds ($402.8 million) through the London IPO, which was announced last month.

ID:nL6E8L975E

The money raised from the listing would be used to acquire a property portfolio from Arcapita worth 760.1 million euros ($984.9 million), with the rest of the purchase funded through a 15 percent equity stake being issued in the firm to Arcapita.

P3 will continue to manage the portfolio on behalf of its private equity owner while Arcapita decides its next move, which could range from reviving the IPO at a later date to a private sale, the banking source said.

"We can confirm that the initial public offering has been withdrawn," a spokeswoman for Arcapita said.

"Arcapita has determined that there is greater value in not pursuing an IPO ... Arcapita will continue to assess all options to optimise value for Arcapita and its shareholders."

The offering was being run by Credit Suisse CSGN.VX and Deutsche Bank DBKGn.DE .

SHADOW OF BANKRUPTCY

In March, Arcapita became the first Gulf entity to file for Chapter 11 bankruptcy protection in the United States, after it was threatened with legal action if it did not repay a hedge fund in full. ID:nL6E8EJ0Z7

This may have helped contribute to the lower valuation which investors placed upon P3 compared with Arcapita.

"There may have been the perception among some that Arcapita was a forced seller but that wasn't the case," the banker said.

While the sale would have been useful to Arcapita's cash position, it had not been forced upon the fund and had been in the pipeline for around two years, the banker added.

P3 is not the only listing candidate to fall short due to valuation mismatches recently. Promsvyazbank, Russia's No.11 lender by assets, pulled a London listing last month after an inability to agree a "fair value." ID:nL5E8LG3MA

"One of the most difficult things about an IPO in the environment we have had is trying to manage the price expectations of the seller and the market," said one equity capital markets banker not involved in the offering.

Russian mobile operator MegaFon is among those still hoping to float in London this year. Roadshows for its offering, which had been due to start in October, have been put back until after its third-quarter results this month. ID:nL5E8LO6BY ($1 = 0.6207 British pounds) ($1 = 0.7717 euros)

(Additional Reporting by Kylie MacLellan in London; Editing by Amran Abocar and David Cowell)

((davidj.french@thomsonreuters.com)(+971 4 362 5864)(Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))

Keywords: ARCAPITA POINTPARK/IPO