Three buyout groups - BC Partners, Onex and Partners Group - will bid for Switzerland-based carton manufacturer SIG Combibloc which is owned by New Zealand’s Reynolds.
SIG was acquired by New Zealand-based businessman Graeme Hart for $2.3bn in 2007 and has annual earnings of around $500m.
SIG's sale is part of Hart's efforts to reduce the $18m debt that has accumulated on his empire owing to deals including the $6bn acquisition of trash bag makers Pactiv Corp in 2010, and the $4.5bn takeover of plastic container producer Graham Packaging in 2011.
Employing around 5100 employees across 40 countries, the company specialises in manufacturing aseptic carton packaging that allows juices, milk, soups and sauces to be stored for a long period of time without refrigeration. It ranks second in global food and drink carton packaging sales, behind Sweden's Tetra Laval international.
Reuters quoted an unnamed source as saying that offers were due on Monday and that several other private equity groups like PAG had dropped their bids. He also added that there was a possibility of Onex and Partners Group tying up with other investors.
There was also a possibility that the valuations of the company in the second round will come down to €3.5-3.8bn from the initial €3.9bn, reported Reuters. This happened partly due to a drop in the company's recent business performance.
According to a presentation on the website of the Reynolds Group, the company has been grappling with lower sales and higher manufacturing and raw material costs, particularly for resin.
Bankers are working on debt packages of about 6.5 times SIG's EBITDA of around €3bn, which include undrawn debt.