GE, IMI, buyout funds line up bids for Italy's Petrolvalves: sources

Tue Sep 2, 2014 2:44pm EDT
 
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By Pamela Barbaglia

LONDON (Reuters) - General Electric (GE.N: Quote), UK engineer IMI (IMI.L: Quote) and buyout funds CVC and First Reserve are preparing binding offers for Italian valve maker Petrolvalves, sources familiar with the situation said. Industry rival Emerson Electric Co (EMR.N: Quote), described by one source as a "motivated" bidder, could also participate in the final round of the auction, launched earlier this year by the Candiani family which wants to sell its majority stake.

The sources said the binding offers could value the Italian company at more than 1 billion euros ($1.31 billion).

The bidding process is complicated by the fact that another Italian family, the Lualdi, owns 40 percent of the company and is reluctant to sell.

Petrolvalves, which was established in 1956 and generates the bulk of its revenues overseas, has set a deadline for binding offers towards the end of September in an attempt to sign a deal later this year, the sources said.

U.S. firm General Electric could place a knockout bid and squeeze out Petrolvalves' minority shareholder, said two sources who cannot be named because the talks are private.

General Electric took over the aerospace-parts business of Italy-based Avio for $4.3 billion last year.

Petrolvalves expects core earnings of more than 70 million euros in 2014 and has about 300 million euros in cash, said a source familiar with the process.

Prospective bidders are working on a multiple of at least 10 times its core earnings, he said.   Continued...

 
The logo of U.S. conglomerate General Electric is pictured at the company's site in Belfort, June 23, 2014.    REUTERS/Vincent Kessler