(adds detail on bidders)
By Sophie Sassard and Matthieu Protard
LONDON/PARIS Oct 31 (Reuters) - Bidders interested in Total’s 3 billion euros ($3.89 billion) gas network and storage business TIGF have until November 16 to approach France’s biggest oil company, two people familiar with the situation said.
The private equity arm of insurer AXA, Credit Agricole’s insurance unit Predica, state-bank Caisse des Depots, Spain’s Enagas and Singapore’s sovereign wealth fund GIC, are interested in bidding, the people said.
“Total is keen to go quick given the social sensitivity of the dossier”, said a person who stressed the condensed timeframe of the process whereby Total would invite a handful of suitors to study TIGF’s books after the mid-November deadline without requiring them to submit indicative bids.
“Bidders would only need to detail their partners and cost of capital but without putting a number on the asset,” said one of the people.
Total has hired Goldman Sachs and Lazard to advise on the deal, the people said.
“We are currently working on negotiating several disposals and I hope we will have some good news on some large asset sales by year-end or let’s say beginning of 2013,” CFO Patrick de la Chevardiere told a conference call with analysts on Wednesday.
The sale is part of Total’s larger plan to shed 15 billion to 20 billion euros worth of non-core assets by 2014.
Large oil and gas firms have been shedding low-margin transportation, storage, refining and distribution units to focus on their riskier and more lucrative exploration and production, or “upstream,” activities.
Possible bidders are currently in talks to form consortiums as none of them could afford to bid alone for TIGF, which faces lower returns on capital in the wake of a recent change in regulation, the people said.
AXA joined forces with Predica as the two French insurers are looking for higher yielding investments to park their cash since they pulled out of sovereign debt and found returns on more conventional investments like corporate bonds to be disappointing.
GIC is considering teaming up with EDF after an earlier discussion with Caisse des Depots failed.
Enagas is seeking a financial partner while Italian gas transport group Snam and its Belgian peer Fluxys are also reviewing bids, the people said.
Total is hoping to close the deal by February 2013, the people said. ($1 = 0.7705 euros) (Reporting by Sophie Sassard in London and Matthieu Protard in Paris; additional reporting by Christian Plumb in Paris.; editing by Simon Meads and Jason Webb)