CORRECTED-Owner may refinance Hilding Anders as sale falters - sources
(Corrects number of bidders to five and the amount of CVC's bid to 800 million euros)
LONDON May 10 (Reuters) - The private equity owner of Swedish bedmaker Hilding Anders may hold onto the company and refinance its debt after the second-round of an auction attracted bids lower than the seller's expectations, three sources close to the matter told Reuters.
One of the sources said five private equity firms had made bids in the second round of the auction process. CVC Capital Partners was one of the bidders and offered 800 million euros ($1.04 billion), which was lower than the level expected by Hilding Anders' owner, Arle Capital Partners, the source said.
CVC and Arle declined to comment.
Arle is now considering alternative options including refinancing around 700 million euros in debt with high-yield bonds and Payment-In-Kind (PIK) Toggle notes, the sources said.
This form of debt is seen as high risk and PIK Toggles allows borrowers to defer interest payments, creating a major problem if they cannot repay in full when the bonds are due.
"The sales process is ongoing, but there are now two processes running in parallel, it's a fluid process," one person familiar with the matter told Reuters.
Hilding Anders' debt is also gaining attention from distressed debt investors looking to buy it cheaply in Europe's secondary loan market in the hope that they will earn more than they paid once a sale or refinancing is completed.
The bedmaker, which has about 6,900 employees working in 40 countries, hired Deutsche Bank earlier this year to handle the sale.
Arle, previously Candover Partners, bought Hilding Anders in 2006 from Investcorp for an enterprise value - equity and debt - of 9.2 billion Swedish crowns ($1.4 billion).
Over the past decade, the bedmaker has been consolidating in Europe and Asia and has made 14 acquisitions. In 2012, it had net sales of 851 million euros and EBITDA (earnings before interest, taxes, depreciation and amortisation) of 122 million euros, according to its website. First quarter net sales were up 4 percent.
($1 = 6.5203 Swedish crowns) ($1 = 0.7709 euros) (Editing by Mark Potter)
- Pope attacks mega-salaries and wealth gap in peace message
- Air strike kills 15 civilians in Yemen by mistake: officials
- Probation for drunk Texas teen driver who killed four sparks backlash
- Atheists face death in 13 countries, global discrimination: study
- South Africa admits error over 'schizophrenic' Mandela signer |