* Dollar General IPO priced at $21, range had been $21-$23

* KKR sells 11.4 mln of the shares, to still own 89.5 pct

* rue21 shares price at $19, over $16-$18 range

By Phil Wahba and Clare Baldwin

NEW YORK, Nov 12 (Reuters) - Discount retailer Dollar General Corp (DG.N: Quote, Profile, Research) priced shares in its initial public offering at $21 each, at the low end of expectations, in the latest effort by a private equity firm to unload a portfolio company in a market that has become unreceptive to such deals.

Dollar General, which is almost entirely owned by private equity firm Kohlberg Kravis Roberts & Co [KKR.UL], had expected the shares to sell for between $21 and $23 each.

Dollar General and KKR sold a total of 34.1 million shares, yielding gross proceeds of $716.1 million in the IPO.

KKR, the only shareholder to offer stock in the IPO, is selling 11.4 million shares, after which it will still own 89.5 percent of the company. KKR bought Dollar General for $7.3 billion in July 2007.

"Private equity firms sell their portion and generally give themselves a large dividend and a lot of people have frowned on that," said Scott Sweet, a senior managing partner with advisory firm IPO Boutique. "There's been too much greed."