EXCLUSIVE-Thailand's Siam Cement among bidders for Grohe-sources
* Tentative bids due at the end of next week - sources
Geberit, Siam Cement likely to bid - sources
* Could be Europe's biggest private equity deal this year
* Grohe was the deal that attracted famous "locust" comment
(Adds Thai M&A data, details on Siam Cement plans)
FRANKFURT/HONG KONG, July 11 (Reuters)- German bathroom fixtures maker Grohe has attracted takeover interest from at least two suitors, people familiar with the process said, in what could be Europe's largest private equity deal of the year.
Thailand's Siam Cement and Switzerland's Geberit have expressed interest in buying the company, according to the people familiar, with the value of the private company said to be worth around 4 billion euros ($5 billion).
Bidders were asked to submit tentative offers by the end of next week, they told Reuters.
Grohe's owners, TPG Capital and the private equity arm of Credit Suisse, are running a so-called dual track process, where one track is to pursue an IPO of Europe's biggest bathroom equipment maker and the other is to sell to a buyer.
Grohe's sale to the private equity firms was what prompted the now famous quote from a German politician who called the industry "locusts" for the way they buy and sell companies.
U.S.-based Fortune Brands has also expressed interest in Grohe in the past, but has not been in active pursuit lately, another person said.
Geberit and Siam Cement were not immediately available for comment, while Fortune also declined to comment.
Siam Cement's interest in Grohe marks another large, overseas purchase pursued by a Thai corporation. Boosted by a surging stock market and economy, Thai companies launched a record $24.7 billion worth of outbound M&A last year, more than the combined total of the previous 10 years, according to Thomson Reuters data. (To read a recent interview with Siam Cement, click on ).
Siam Cement, Thailand's largest industrial conglomerate, said this week it planned to expand overseas to meet the booming demand in Southeast Asia. The Thai royal family's investment arm, Crown Property Bureau, owns 30 percent of Siam Cement and it has invested 92 billion baht ($2.9 billion) since 2001.
Grohe's private equity owners have signaled they're willing to sell for two years now. In addition to previously sounding out buyers, the company launched preliminary plans for an initial public offering (IPO).
Private equity firms usually prefer to sell to a buyer as the process is quicker and is less subject to the fluctuations of the stock market than an IPO.
Grohe, which has an estimated global market share of about 8 percent, posted sales of 1.4 billion euros and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 273 million euros last year. It has not provided specific 2013 earnings guidance, which is usually used as a starting point to compare the enterprise value of companies.
Grohe's owners are hoping for a valuation similar to the 14.4 times EBITDA that Geberit trades at, the sources said. Bidders, on the other hand, are likely to offer valuations more in line with the 10.3 times EBITDA that French peer Legrand trades.
"Grohe continues to evaluate all strategic options," a spokesman for the company said.
TPG and Credit Suisse, as well as Goldman Sachs, which is working with Credit Suisse to run the sale, declined to comment.
TPG and Credit Suisse bought Grohe for 1.5 billion euros in 2004 from BC Partners, backed with 1.45 billion in debt, most of which was loaded on to Grohe, leading to criticism of private equity investors in Germany.
Private equity firms usually make their money by purchasing a company with mostly borrowed money, cutting costs across the business, and selling later through an IPO or sale for more than the initial cash they paid. The costs cuts and debt loads - together with occasional bankruptcies - has attracted the ire of politicians and regulators since the leveraged buyout industry began in the 1970s.
The head of the centre-left Social Democratic Party at the time of the BC Partners deal dubbed private equity firms "locusts" that sucked the life out of targets before letting them go bust and moving on.
In a move to shift production to low-wage countries, TPG and Credit Suisse began job cuts at Grohe but carried out many fewer than the 3,000 redundancies originally planned. It kept keeping research and development in Germany. ($1 = 0.7778 euros)
(Reporting by Arno Schuetze, Alexander Huebner in FRANKFURT and Denny Thomas in HONG KONG; Editing by Alex Smith, Michael Flaherty and Jeremy Laurence)