UPDATE 1-Mattamy, Meritage also bid for Taylor Wimpey-sources

Mon Feb 28, 2011 10:33am EST

* Mattamy, Meritage are bidders - sources

* An offer above book value was too low - source

* Another round of bids was due Friday - sources

* Taylor Wimpey shares up 5.4 pct (Adds byline, background, shares)

By Helen Chernikoff

NEW YORK, Feb 28 (Reuters) - British homebuilder Taylor Wimpey (TW.L) received at least four bids for its North American assets, including one valuing them as high as $1.05 billion, by last Friday's deadline, people familiar with the matter said.

Mattamy Homes, Canada's largest new home builder, and U.S. builder Meritage Homes Corp (MTH.N) are bidding on some or all of Taylor Wimpey's U.S. and Canadian divisions, said a source with direct knowledge of the bids.

Reuters previously reported that hedge fund billionaire John Paulson's Rain Tree Investment Corp and Berry Sternlicht's Starwood Capital Group were bidding on the assets, whose proceeds the heavily leveraged Taylor Wimpey could use to pay down debt. [nN19223821]

Taylor Wimpey is selling Taylor Morrison, which is based in Scottsdale, Arizona, and Monarch Corp, based in Toronto.

Taylor Morrison was the 13th-largest homebuilder in 2009, according to trade publication Builder Magazine. Monarch builds high-rise condos in the Toronto area and single-family planned communities in the Canadian province of Ontario.

A private builder that had offered to pay in the range of 90 percent to 110 percent of the combined assets' $950 million book value has dropped out of the auction, said another source with direct knowledge of that bid.

JPMorgan Chase (JPM.N), the bank hired to run the sale, told that bidder that its bid was too low, the source said.

Private equity firms including Paulson and Starwood have established a track record of exploiting the U.S. housing slump to scoop up land on the cheap to hold and sell when values recover.

Homebuilders which have survived the slump so far would eye Taylor Morrison and Monarch's land to restock their own lot pipelines.

The sources all requested anonymity because the sale is ongoing.

Meritage declined to comment. Mattamy could not be reached.

Taylor Wimpey's shares were up 5.4 percent in late-afternoon trading on the London Stock Exchange. (Reporting by Helen Chernikoff; Editing by Lisa Von Ahn, Dave Zimmerman)