SYDNEY, July 15 U.S. buyout giant KKR & Co LP is expected to join Australia's Pacific Equity Partners (PEP) to lodge a $1 billion bid for Australian compliance company SAI Global Ltd, two sources familiar with the matter told Reuters.
The pairing of KKR and Australia's largest private equity firm were expected to lodge an indicative bid by a first-round deadline of late Tuesday, said the sources who were close to the deal but not permitted to comment publicly because of the sensitivity of the matter.
One of the sources said up to two other potential buyers could lodge an indicative bid. The source did not disclose their identities.
An SAI spokesman declined to comment and a spokeswoman for KKR and PEP could not immediately be reached for comment.
Early-stage interest appears to justify a decision by SAI to open up its books for potential buyers, after struggling with two years of declining profits and recently terminating its chief executive officer's contract after four months.
On May 26, PEP, then without KKR, revealed it had made a A$1.1 billion ($1.03 billion) non-binding proposal to buy SAI, the former commercial arm of Australian industry standards aggregator Standards Australia.
SAI then said it was open to a possible sale but revealed it had received subsequent approaches from other unnamed suitors, leading it to make public details of its business for due diligence.
SAI and its adviser Macquarie Group Ltd will now decide which of the indicative offers, if any, should progress to a second round of offers.
SAI shares closed steady at A$5.05 in a flat overall market.
($1 = 1.0647 Australian Dollars) (Editing by Stephen Coates)