* Vinci seen as front runner - sources
* ADP may be handicapped by France's majority stake -
* Final bids due early next week - sources
* French genocide role roils auction - sources
(Adds additional comment, background)
By Christian Plumb and Gilles Guillaume
PARIS, Feb 29 Two French companies have
become the final bidders for a stake in Turkish airport operator
TAV Havalimanlari Holding, an auction roiled by an
international spat over the mass killing of Armenians nearly a
French construction group Vinci said on Wednesday
it would bid in coming days for the stake, which sources have
said would constitute up to 40 percent of TAV, as its two key
stakeholders sell down their holdings.
Aeroports de Paris is the other finalist for the
stake in the company, which operates 10 airports including
Turkey's biggest, Istanbul Ataturk, as well as terminals in
Tunisia, Macedonia and Georgia.
The deal was expected to value the entire company at more
than $2 billion.
Two sources close to the deal told Reuters they saw Vinci as
frontrunner, while a third said it was too early to choose a
winner given that final bids were only due early next week.
ADP has been handicapped by the French government's majority
stake in the operator at a time of Turkish ill-will toward
France resulting from a new law that would make it illegal to
deny the mass killing of Armenians by Ottoman Turks.
That law was struck down by France's Constitutional Council
on Tuesday, but French President Nicolas Sarkozy asked his
government to draft a new version.
"Vinci is expected to win the TAV deal. Vinci and ADP will
place their bids in a few days' time," said one source close to
A third source close to the transaction, however, cautioned
it was not a done deal, noting that ADP's bid was likely to be
higher than Vinci's "by a somewhat significant amount".
"They are sort of overpaying to make sure they stay in the
process and are eventually chosen by the sellers to be the last
man standing," the third source said, adding that Vinci was
counting on ADP's government ties scuppering its chances.
TAV shareholders, construction firm Tepe Insaat and Akfen
Holding, are selling 18 percent stakes each, sources
have said. Minority shareholders will also sell their stakes,
although the total size of the stake has yet to be determined.
The third source close to the transaction said the stake
would be kept below the level at which it would trigger a
mandatory buyout offer for all outstanding shares - likely
somewhere between 35 and 40 percent.
The deal will value all of TAV at more than $2 billion, the
source said. The company's current market capitalisation is 3.22
billion Turkish lira or $1.84 billion.
ADP was not available to comment.
(Additional reporting by Julien Ponthus and Cyril Altmeyer in
Paris and Seda Sezer and Asli Kandemir in Istanbul; Editing by
Caroline Jacobs and David Cowell)