* Owner feared share price plunge after IPO
* Equity markets up 173 percent year to date
* One Equity Partners may revive plans to sell Constantia - source
By Arno Schuetze and Alexander Hübner
FRANKFURT, Nov 26 (Reuters) - Austrian packaging group Constantia Flexibles has cancelled Wednesday's planned share listing after investor demand fell short of expectations.
Though the books had been covered about one and a half times, the company's majority owner One Equity Partners decided against listing the business in case it raises too little in the initial public offering (IPO) and the share price plunges on its market debut, two people familiar with the plans said.
Strong equity markets this year have helped to drive a revival in European listings activity after several years of drought since the financial crisis.
The total raised by European companies between the start of the year and Nov. 21 was $30 billion, up 173 percent on the same period last year.
However, the past three big European IPOs, including French flooring manufacturer Tarkett's market debut last week, are all trading below their listing price.
"People are very focused on the aftermarket," said another source familiar with the matter. "Some recent European IPOs haven't performed that well, and because of that investors have become a lot more cautious."
One Equity Partners, part of U.S. bank JPMorgan, may now revive plans to sell its 75 percent stake in Constantia to another private equity firm, a separate source familiar with the transaction said.
The remaining 25 percent of Constantia, which makes aluminium-foil, paper and plastic-film packaging and labels for the food, pharmaceutical and beverage industries, is owned by the founding family's foundation.
One Equity Partners had tested the market for Constantia earlier in the year and received tentative bids from private equity groups including CVC, Blackstone and EQT.
CVC, EQT and Blackstone all declined to comment on Tuesday.
Constantia's Chief Executive said that the company's strategy is not at risk despite the IPO cancellation.
"The financing of the company's global expansion strategy is secured without the transaction and the company will continue its profitable growth," Thomas Unger said in a statement.
Constantia, which holds the second-biggest share of the European flexible packaging market behind Australia's Amcor , had hoped to raise up to 821 million euros ($1.1 billion) from the IPO.