* Millhouse may pay 500 mln euros under some circumstances
* EBRD confirms has teamed up with Advent
* Hypo Alpe Adria, finance ministry decline comment
(Adds EBRD official's comment, no comment from Hypo)
VIENNA/LONDON, July 29 London-based investment
group Millhouse Capital said it was ready in principle to raise
its offer to 500 million euros ($672 million) for nationalised
Austrian lender Hypo Alpe Adria's Balkans network,
raising the stakes in the sale process.
Millhouse, owned by German businessman Ralf Dodt, had
earlier offered 200 million euros, a spokesman for the company
said on Tuesday. He said Millhouse could help protect Austrian
taxpayers by providing 1 billion euros in guarantees for loans
Hypo had made, and that it intended to keep the Balkans business
Hypo, which Austria had to nationalise in 2009 after a
decade of breakneck expansion at home and in the former
Yugoslavia, is selling the Balkan network, its prime asset,
while hiving off toxic assets into a "bad bank".
Sources familiar with the process said this month, before
Millhouse made its bid, that the front-runners for the assets
were Advent International in partnership with the European Bank
for Reconstruction and Development, and a group of
Bulgarian investors headed by airline and property owner Denis
Barekov, backed by Russian financial group VTB.
Millhouse - which has no ties to Millhouse LLC, which
manages assets of Russian oligarch Roman Abramovich - said last
week it had abandoned plans to join the Bulgarian consortium.
At least one other investor, Russian businessman Igor Kim's
Expobank, has bid for the whole Balkans network, three sources
familiar with the process have said.
"Under certain circumstances we are willing to pay the book
value of the bank of 500 million euros," a Millhouse spokesman
said in an email, without specifying any conditions.
"It is not in our intention to break the bank in separate
parts. We want to invest in these countries where the bank is
active," the spokesman said.
Nick Tesseyman, head of the EBRD's financial institutions
sector, confirmed the bank's interest in the sale. "We have
spent a lot of time on this deal and think it is a good
investment. We are not completely confident of a good conclusion
but we are hopeful of a good conclusion," he told Reuters.
Tesseyman likened the potential investment to the EBRD's
move to fund 120 million euros of a capital increase at Bank of
Hypo's Balkan network, comprising banks and leasing
operations in Serbia, Croatia, Bosnia, Slovenia and Montenegro,
had assets of 8.6 billion euros at the end of 2013 but a book
value of only 500 million after a series of impairments.
The business has lost value while Austrian politicians
wrangle over what to do with the rest of the bank, which has so
far received 5.5 billion euros in state aid.
The finance ministry said only that Hypo was handling the
sale and that the government wanted a quick deal that spared
taxpayers as much as possible. Hypo declined comment.
Finance Minister Michael Spindelegger told parliament this
month that seven bidders were in the race. This included bidders
for just parts of the unit.
Deutsche Bank is advising on the sale.
($1 = 0.7444 Euros)
(Reporting by Georgina Prodhan and Michael Shields in Vienna,
with Marc Jones in London; Editing by David Holmes)