April 7, 2009 / 3:35 PM / 11 years ago

Philips front runner to buy Italy's Saeco-source

MILAN, April 7 (Reuters) - Dutch consumer electronics giant Philips NV (PHG.AS) is in pole position to buy Italian coffee machine maker Saeco, which is owned by private equity firm Pai Partners, a source close to the matter said. A clearer picture on a deal will have to wait for the end of April and developments on the renegotiation of Saeco’s 560 million euros ($758 million) debt, the source said.

“There are talks open with different potential (buyers of Saeco control) but Philips is the most advanced in the due diligence,” the source said. A second source said there are at least three possible buyers carrying out due diligence.

Philips declined to comment.

In the last few weeks media reports have spoken of other possible buyers such as Germany’s WMF WMFG.DE, France’s SEB (SEBF.PA), Italy’s N&W Vending, which is controlled by Barclays Private Equity and Investcorp, and Sweden’s Electrolux (ELUXb.ST).

Italy’s De Longhi (DLG.MI), also mentioned in reports, is “absolutely not interested”, a third source said. The UK’s Change Capital fund in a tie-up with Sergio Zappella, Saeco’s former owner, is seen as another possible contender, along with various private equity, the reports have said. (Reporting by Massimo Gaia; Writing by Nigel Tutt; Editing by Greg Mahlich) ($1=.7389 euros)

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