* Strong interest from trade buyers-sources
* Nutreco declines to comment on reported interest
(Recasts with sources on valuation)
LONDON/AMSTERDAM, May 24 Private equity firm
Permira [PERM.UL] expects to sell French animal feed business
Provimi for around 2 billion euros ($2.8 billion), people
familiar with the matter said on Tuesday.
The valuation target is based on strong interest from other
companies in the sector before the start of the sales process,
which is in its early stages, one of the people said.
JP Morgan, which is soliciting offers for the business,
declined comment, as did Permira and Provimi.
A Dutch paper had reported animal feeds group Nutreco NV
NUTR.AS was preparing a bid for Provimi and was mulling
Het Financieele Dagblad said Nutreco, which has looked at
buying Provimi twice before, is considering a share issue or a
divestment to help fund the potential transaction.
SNS Securities analyst Richard Withagen questioned whether
Nutreco would pay as much as 1.4 billion euros, the minimum
takeover price cited by market observers in the report.
"I really have a hard time seeing Nutreco paying 1.4 billion
euros for Provimi. They really should not pay more than 1
billion and the question is whether (Permira) wants to sell it
for that amount," he said.
Permira bought Provimi at the height of the bull market in
2007 in a deal that valued the business at 1.7 billion euros.
Withagen added that although Provimi would be a good
strategic fit, Nutreco has shown strong financial discipline in
recent years, demonstrating also that it can assimilate bolt-on
deals rather than take on a large acquisition such as Provimi.
A Nutreco spokesman reiterated the company had a war chest
for acquisitions of between 500 million euros and 600 million
but declined to comment on the report.
The company said at its annual shareholders meeting in March
that Provimi would be a good fit.
Nutreco previously looked at buying Provimi in 2002 and
2007, but was outbid by private equity funds.
(Reporting by Victoria Howley and Simon Meads in London, with
Aaron Gray-Block in Amsterdam; Editing by Mike Nesbit and David