LONDON Nov 13 Advent is among a handful of private equity firms due to submit final round bids for discount retailer B&M, banking sources said on Tuesday.
Advent joins Blackstone, BC Partners, Clayton Dubilier & Rice and KKR to battle it out for a significant stake in the company, which has a price tag of 850 million pounds ($1.35 billion).
The business has attracted interest from private equity firms as the discount retail sector is seen as a profitable business in the current difficult economic climate as people tighten their belts.
Warburg Pincus bought discount retailer Poundland from Advent International in 2010 for around 200 million pounds, and was seen by its rivals as a good buyout, bankers said.
Rothschild is running the sale process and bids are due November 27, bankers said.
Advent declined to comment.
Bankers are putting together debt packages, either of all senior leveraged loans or senior and mezzanine debt, of around 400 million pounds to back a buyout. This would equate to 4 to 4.5 times B&M's approximate 90 million pound EBITDA, bankers said.
However banks may use a higher level of EBITDA of around 110 million pounds if expected earnings are taken into account, bankers added.
Leverage could be pushed to around 6.5 times after taking into account the store's leasing agreements, which is concerning some bankers.
B&M, owned by brothers Simon, Bobby and Robin Arora, has over 290 stores throughout the UK and employs over 10,000 staff. The sale could catapult the three among the richest families in the UK. The Liverpool-headquartered company sells a range of products including toys, furniture and foodstuffs, according to its website. ($1 = 0.6302 British pounds) (Reporting by Claire Ruckin; Editing by Louise Heavens)