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AMSTERDAM (Dow Jones)--Four or five parties have been invited to submit second-round bids in the sale process of Essent Milieu, Essent NV's waste management business, sources familiar with the matter told Dow Jones Newswires Thursday.
Second-round bidders include the Orange consortium, consisting of Infrastructure funds managed by Dutch banks NIBC Bank and Fortis Bank Netherlands; U.S. Waste Management Inc.'s (WMI) Wheelabrator and RREEF Alternative Investments, an investment fund of Deutsche Bank AG's (DB) asset management division; Covanta Holding Corp. (CVA) together with an unnamed financial party. Private equity firms Charterhouse Capital Partners LLP and French PAI Partners are also shortlisted, the sources said.
Private equity firm BC Partners is also likely to have been selected, various people said.
The deal could still fail to go through if the price comes in too low, the people said. The price for Essent's waste management business is under pressure from financing restraints, which mostly affects the price private equity might be able to pay. Strategic buyers may be able to pay more since they aren't constrained by investment criteria.
The advising banks, Credit Suisse and ING, are close to arranging an approximate EUR400 million to EUR500 million staple financing for the deal, one of the people said. Staple finance is typically arranged by the vendor's advising banks in the sale of a business in which there is no recourse to the seller. The winning bidder has the option to accept the loan on offer or make its own financing arrangements.
Various people familiar with the process have said the sale price is most likely to come in under EUR1 billion, while Essent has said the unit should fetch around EUR1.3 billion.
Shortlisted bidders have now been invited to do due diligence before they tender a binding offer for the business. The deadline for second-round bids is likely to be in around two months' time.
-By Robin van Daalen, Marietta Cauchi and Carol Dean, Dow Jones Newswires; +31-20-5715200; robin.vandaalen@dowjones.com
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