By Claire Ruckin
LONDON (Reuters) - Private equity firms are preparing bids of up to 4 billion euros ($5.3 billion) for French catering company Elior, in one of the biggest European private equity auctions since the credit crunch of 2008, banking sources said.
Owner Charterhouse Capital Partners decided to sell Elior, either in part or in whole, in November and hired Credit Agricole, HSBC and Rothschild to manage the process.
BC Partners and CVC Capital Partners are interested in bidding, banking sources said on Wednesday. The two firms could team up to make a joint bid, a banker close to the deal said.
Two U.S. private equity firms - Blackstone, and Clayton, Dubilier and Rice - are also interested in bidding separately, sources said.
BC Partners, CVC Capital and CD&R declined to comment. Blackstone and Charterhouse were not available to comment.
Charterhouse bought Elior for 2.5 billion euros in 2006. The private equity firm owns 62.3 percent, Elior's co-founder Robert Zolade has 24.7 percent and Chequers Capital 7.8 percent. The remaining 5.2 percent is owned by other investors.
Elior's contracts unit provides catering to businesses, schools and hospitals and accounts for around two thirds of the firm's overall business. The concessions business caters for airports, railways and motorways.
First round bids on the auction process, which is likely to attract more bids, are due in March, bankers said.
Bankers are working on debt packages of around 2 billion euros for the private equity buyers, as confidence returns to the European buyout market.
Credit Agricole and HSBC are working on a staple financing package that offers potential buyers funds to pay for the acquisition, bankers said. Other banks are trying to join the staple financing, they said, which is likely to include leveraged loans and high yield bonds.
Staple financings speed acquisitions as they give buyers confidence that financing is available. Other banks are working on rival debt packages for bidders.
Elior's business includes a contract and concessions unit. If offers fall short of the 3-4 billion euros sale price Charterhouse is seeking, it could consider selling Elior's contracts business alone, several sources said.
($1 = 0.7487 euro)
(Additional reporting by Christian Plumb and Anjuli Davies; Editing by Tessa Walsh)