FRANKFURT/DUESSELDORF, Germany: Thyssenkrupp is nearing a full sale of its elevator division, three people familiar with the matter said, adding this would secure the highest valuation of about 16 billion euros (US$17.3 billion) to help it pay down debt.
The sale, potentially Europe's biggest private equity transaction in 13 years, is entering its final stretch, with two buyout consortia in a neck-and-neck race to acquire the world's fourth-largest lift maker.
Under the deal, Thyssenkrupp would likely sell all of the division, Elevator Technology, to realise the highest valuation, the people said. The 16 billion euros is roughly the same combined total of its net debt - which soared in the last quarter - and pension liabilities.
There is a small chance the group could retain a minority stake in the business, the people said, adding the likelihood of that happening had decreased in recent weeks.
Thyssenkrupp declined to comment.
Shares in Thyssenkrupp rose as much as 1.4per cent on the news.
The group said earlier this week it would either sell a majority or all of the unit. Labour representations, as well as the group's top shareholder, the Alfried Krupp von Bohlen und Halbach foundation, have argued in favour of keeping a stake.
Any private equity sale would likely see the division being loaded up with debt, lowering the chance it will have enough room to pay dividends or pass on huge amounts of cash, the people said, making a stake less attractive.
Thyssenkrupp said earlier this week it was focusing on negotiations with two consortia: Blackstone , Carlyle and the Canada Pension Plan Investment Board; and Advent and Cinven .
Sources have previously said that the Abu Dhabi Investment Authority and Germany's RAG foundation are also part of the Advent/Cinven tie-up, which sources said submitted a bid just shy of the roughly 16 billion euros offered by its rival consortium.
Bidders have until next week to make final changes to their binding bids submitted earlier this month, one of the people said. Thyssenkrupp's supervisory board is scheduled to meet on Feb. 27 and could make a decision, sources have previously said.
(Reporting by Edward Taylor, Christoph Steitz, Arno Schuetze and Tom Kaeckenhoff; Editing by Thomas Seythal and Pravin Char)Ads Links by Easy Branches