* Listing before Christmas
* To launch prospectus around Sept 28
* Sees sales growth of about 3 percent this year (Adds analyst comment)
By Victoria Thieberger
MELBOURNE, Sept 11 (Reuters) - U.S. private equity firm TPG plans to list Myer, Australia's largest department store chain, on the local stock exchange this year in what is likely to be a major test of faith in the market's turnaround.
Retail analysts valued Myer at more than A$2 billion ($1.7 billion), but cautioned that much depended on the outlook for the retail sector in what will be the country's biggest initial public offering since the credit crisis began two years ago.
"It's a very opportunistic time for the current owners to sell their stake," said Constellation Capital Management analyst Brian Han.
"The market and the retailers are pretty buoyed by all the stimulus from the government, so the earnings are holding up extremely well. But what will sales look like in the next 12 months?"
Myer, bought by a consortium led by TPG Capital, for A$1.4 billion ($1.2 billion) in 2006, revealed TPG's decision on Friday in the store chain's annual earnings statement, but it gave no details on the planned IPO.
It said these would be revealed when its lodged a prospectus with Australian regulators on or about Sept. 28.
The department store chain has 65 stores across Australia, compared with 36 for upmarket rival David Jones Ltd, and had turnover of about A$3.3 billion in 2008/09.
Myer has some three million shoppers a week through its doors, in a country of 21 million.
The department store wants to have the listing underway before the busy Christmas season and the timing will also take advantage of the upturn in the stockmarket, analysts said.
Australia's stock market has rallied 40 percent since March as the country dodged recession, and rival David Jones' share price has more than doubled in that time.
Myer's IPO comes amid a resurgence of global investor interest in new listings from New York to Shanghai, as private equity firms unload holdings in their companies.
"I am confident that we now have the foundations in place to start delivering top-line growth in 2009/10 and beyond," Chief Executive Bernie Brookes said in the statement, which reported 14.8 percent profit growth for the year to July 25, 2009.
Brookes said he was optimistic about the outlook for 2009/10, forecasting sales growth of about 3 percent and growth in earnings before interest and tax growth of about 10 percent, assuming that current market trends continued.
Sales in the first six weeks of the current financial year ran ahead of the 3 percent annual growth forecast.
Analysts said that Myer could be worth about A$2 billion plus debt, which was about A$650 million in January.
Myer was bought three years ago from struggling supermarkets owner Coles Group, which was later acquired by Wesfarmers Ltd. The new owners have overhauled the stores, which suffered from years of underinvestment under Coles.
TPG and Blum Capital have a combined stake of 84.2 percent, while the Myer Family Company holds 8.3 percent and management holds 7.5 percent. ($1=1.158 Australian Dollar) (editing by Mark Bendeich)