Bilfinger close to finalizing Australia IPO: sources

SYDNEY/MELBOURNE Tue Jun 1, 2010 4:03am EDT

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SYDNEY/MELBOURNE (Reuters) - German construction group Bilfinger Berger (GBFG.DE) is close to finalizing plans for the $1.2 billion float of its Australian arm and could start marketing the issue within two weeks, sources familiar with the transaction said on Tuesday.

A final decision was still in the hands of the vendors but could come within days and a prospectus was expected to be lodged in the next two weeks, one source said. The sources declined to be identified as they were not authorized to speak to the media.

Bilfinger's move comes despite recent market volatility and a slide in the Australian dollar.

Brokers involved in the float are valuing the business, recently rebranded as Valemus, between A$1.4 billion and A$1.75 billion ($1.12 billion-$1.5 billion), according to two fund managers who attended recent briefings.

Deutsche Bank (DBKGn.DE), one of the joint lead managers, valued it at between 12.5 to 15.1 times earnings, but that was before the sharp falls in the market, a fund manager said, declining to be named as the information was not public.

By comparison, its much bigger rival, Leighton Holdings (LEI.AX), is trading at about 14 times forecast earnings for 2011 following the market's slide.

Investors expect Valemus to be priced at a big discount to Leighton. Valemus is about one-sixth the size and lacks a large mine-contracting business, which is one of the most valuable parts of Leighton's portfolio.

Other joint lead managers on the float are Macquarie Capital Advisers (MQG.AX) and Goldman Sachs JBWere (GS.N). ($1=$1.180 Australian Dollar) (Reporting by Michael Smith and Sonali Paul; Editing by Mark Bendeich and Valerie Lee)

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