Exclusive: CD&R among bidders for SocGen's TCW: sources

Thu Jun 14, 2012 1:32pm EDT
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By Paritosh Bansal, Jessica Toonkel and Jennifer Ablan

NEW YORK (Reuters) - Clayton, Dubilier & Rice and at least two other private equity firms submitted bids for TCW Group in recent weeks as Societe Generale (SOGN.PA: Quote) holds an auction to sell its Los Angeles-based asset manager, two sources familiar with the situation said.

The sources said that TCW, which oversees about $128 billion in assets, including the TCW and MetWest fund families, could fetch about $700 million.

TCW's management is leading the buyout discussions and is expected to take an equity interest if a deal materializes, according to sources. The private equity firms have lined up financing for the transaction, they said.

The names of the other two private equity firms and the names of TCW executives leading the buyout talks could not be learned.

Representatives of SocGen, TCW and CD&R declined to comment.

French bank SocGen is seen as a laggard in the industry race to meet tougher capital requirements under the pending Basel III rules. The bank has responded by speeding up its efforts to bolster its balance sheet - it scrapped its dividend and has been selling loans and other assets - but a sale of an actual business line would bring a quick injection of capital and potentially ease investor jitters.

Financial services bankers expect more European banks to sell assets abroad, including in the United States, to raise capital as they struggle to deal with the impact of the ongoing sovereign debt crisis.

There is no guarantee a deal for TCW would materialize. The asset manager, which once employed star bond trader Jeffrey Gundlach as chief investment officer, has been the subject of buyout speculation on multiple occasions in the aftermath of the financial crisis of 2008. SocGen has in the past denied it was looking to sell the business.   Continued...