RLPC-Matas sale backed with 500 mln euro debt package-bankers

By Claire Ruckin

LONDON, Oct 2 (Reuters) - Banks are offering up to 500 million euros ($645 million) of debt to bidders in private equity firm CVC's sale of Danish store group Matas, as retail deals continue to dominate the European leveraged buyout market this year.

Banking sources said on Tuesday Morgan Stanley and Nordea, which are running the auction for the health and beauty chain, have put together a financing package which will be available to back the buyout should it go to a private equity bidder.

The financing consists of senior leveraged and mezzanine loans of between 460 to 500 million euros, the equivalent of 5.5 to 6 times Matas' approximate 80 million euros of earnings before interest, tax, depreciation and amortisation (EBITDA), they said.

Matas was put up for sale earlier this year and could fetch around 800 million euros.

For the first three quarters of 2012, M&A-related leveraged loans in Europe, the Middle East and Africa (EMEA) totalled $19 billion in 59 deals, a 46 percent drop compared with the $41.5 billion in 111 deals during the first three quarters of 2011, according to Thomson Reuters LPC data.

Retail-related leveraged loans, however, have grown 16 percent to $3.2 billion year on year, making it the biggest sector for buyout deals as private equity firms look to pick up cheap assets in an industry battered by an economic downturn.

First round bids for Matas were received from a mixture of private equity and trade buyers on Sept. 28. It is now being decided who will go through to the next stage of the auction process, bankers said.

CVC bought Matas in 2007 for 5.2 billion Danish crowns ($900 million) backed with 3.8 billion crowns of debt.

Matas sells beauty products and non-prescription medicines from around 300 shops in Denmark.

($1 = 0.7749 euros) ($1 = 5.7773 Danish crowns)

(Reporting by Claire Ruckin; Editing by Mark Potter)

((claire.ruckin@thomsonreuters.com)(+44)(0)(207 542 1891)(Reuters Messaging: claire.ruckin.thomsonreuters.com@reuters.net))

Keywords: MATAS LOANS/