By Anjuli Davies and Arno Schuetze
LONDON/FRANKFURT, April 1 The owners of Swiss-based duty free operator The Nuance Group are close to appointing banks to explore an initial public offering that could value it at more than 1.2 billion Swiss francs ($1.4 billion), three sources told Reuters.
Since a 2011 buyout valuing Nuance at 676 million Swiss francs, the group has been 50 percent owned by private equity firm PAI Partners and 50 percent owned by Italian retailer GruppoPam through its subsidiary GECOS.
Banks have been invited to take part in a so-called beauty parade to advise on the possible IPO, which could be launched later this year, two of the sources said, who asked not to be named as the matter is not public.
Credit Suisse and UBS are tipped as likely front runners to win the mandates, one of the sources said.
It is also possible that potential rival travel retailers such as Swiss-based Dufry could pre-empt a stock market listing with an offer, another source said.
While a stock market listing of a minority stake of Nuance will provide an exit opportunity for buyout group PAI, GruppoPam is not expected to sell out, a third source said.
Nuance operates around 300 stores, mostly in airports in more than 19 countries and last year posted a turnover of 1.8 billion Swiss francs and earnings before interest, taxes, depreciation and amortisation of 116 million francs.
The group would likely be able to fetch a multiple of 10-12 its operating earnings or 1.2-1.4 billion francs in a potential IPO, one of the sources said.
The Nuance Group, PAI Partners Dufry, UBS and Credit Suisse declined to comment. GruppoPam could not immediately be reached for comment. ($1 = 0.8834 Swiss francs) (Additional reporting by Sophie Sassard. Editing by Steve Slater and Jane Merriman)