At least four private equity firms were expected to place first round offers for leading German budget fashion retailer Takko, people familiar with the matter told Reuters, the publisher of Buyouts.
Bankers said discount retailers were typically valued at 10 times EBITDA, valuing Takko at about €1.25 billion ($1.75 billion).
A growing number of price-conscious Germans have been turning to discount clothing stores, helping to boost sales at Takko, one of the country’s largest and fastest-growing clothing chains, to 900 million euros in the year to end-April.
An estimated 25 percent of German adults have purchased its products in the last year, according to Advent’s Web site.
Takko is the latest in a series of European companies owned by private equity firms that are close to changing hands in a so-called secondary buyout, or a return to the public market, as owners look to cash out of their best performing investments.
Advent, which bought the business in 2007 from Permira for 770 million euros, plans to sell or spin off the business by early next year, a source said in August.
Takko declined to comment. The private equity firms declined to comment or had no immediate comment.
Victoria Howley is a Reuters correspondent in London. Quentin Webb, Simon Meads and Arno Schuetze also contributed to this report.