June 14, 2012 / 5:15 PM / in 5 years

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

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) 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.

Two other sources familiar with the situation said a deal has also been complicated because of the difficulty of valuing TCW's share of profits from two units that it separated in the past couple of years - EIG Global Energy Partners LLC, which specializes in private investments in energy, and Crescent Capital Group, which invests in credit.

However, the asset manager looks more attractive now. Its assets under management have grown in the last year as investors pile into bonds in search for yield and capital preservation.

The company said on Wednesday that total assets under management in its TCW and MetWest-branded mutual funds had crossed $40 billion, more than double the AUM in 2010 when it bought Metropolitan West Asset Management.

In May, sources familiar with the situation said that top TCW executives were in early stage talks with SocGen to buy the firm and that they were speaking to several private equity firms about backing a takeover.

Reporting by Paritosh Bansal, Jessica Toonkel, Jennifer Ablan and Greg Roumeliotis in New York, and Christian Plumb and Lionel Laurent in Paris; Editing by Phil Berlowitz, Gary Hill

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