RLPC-Bankers assemble Scout 24 financing before bid deadline

LONDON Fri Nov 8, 2013 8:34am EST

LONDON Nov 8 (Reuters) - Bankers are assembling financing packages of up to 750 million euros ($1.00 billion) to back the sale of a stake in Deutsche Telekom's online classified advertising unit Scout24 before Monday's bid deadline, bankers said on Friday.

Goldman Sachs and Jefferies were hired earlier this year to advise on the sale, which values the whole business at 1.8 billion euros.

Deutsche Telekom was looking to sell a 30 percent stake in Scout24 but some bidders wanted to buy a larger stake in the business.

The remaining bidders, which include EQT, Hellman & Friedman and Silverlake are expected to submit bids for a 30 percent stake. Some of the private equity firms could also submit bids for a 70 percent stake in the business, banking sources said.

Deutsche Telekom, Scout 24 and EQT declined to comment. Hellman and Friedman and Silverlake were not immediately available to comment.

The private equity bids are backed by debt packages of around 6 times Scout24's approximate 125 million euro Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA), the banking sources said.

The debt could be a mixture of senior leveraged loans, mezzanine loans and high yield bonds, they added.

Most major loan arranging banks are working on the debt packages for potential buyers, and are keen to provide financing after a lack of M&A this year.

"Scout24 is a good credit and banks will want to be involved in funding the buyout. The deal will have a massive equity cheque ... because the company has a lot of equity value," one of the sources said.

Deutsche Telekom also offered a shareholder loan as an alternative to bank financing.

The German telecom giant wants to sell part of Scout24 to free up cash for a planned 6 billion euro investment in broadband in Germany.

Scout24 is active in 22 countries and employs over 1,300 people, according to its website. ($1 = 0.7472 euros) (Editing by Tessa Walsh)

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