Private equity firms Bain Capital and Blackstone Group are among the bidders for Ceridian
Two corporations are also bidding for the company, the sources said, but it was unclear which companies were involved.
Whether Bain and Blackstone are bidding as a team or separately was also unclear. Ceridian has a market value of $4.6 billion.
The pursuit of the whole company comes as a major Ceridian shareholder, hedge fund manager William Ackman, pushes for a spin-off of Ceridian's fast growing Comdata division.
Ackman's Pershing Square Capital Management, which previously prodded burger chains McDonald's
Comdata offers payment processing and issues credit cards and debit cards primarily for the U.S. trucking and retail industries. Human Resource, the larger of the two divisions, offers payroll, benefits administration and other services.
Frustrated with Ceridian's response to his approach, Ackman, who owns 14.3% of the company, is pushing ahead with plans to try to replace its eight-member board later this spring with industry executives and himself.
Ceridian last month said it had hired investment bank Greenhill & Co.
The hedge fund manager feels he and other shareholders stand to make significantly more money should Ceridian be split up rather than sold. Ackman has said Comdata would be more profitable as a stand-alone company.
Greenhill and Pershing Square declined to comment for this story. Bain and Blackstone also declined to comment.
Ceridian has said nothing beyond its last news release and conference call, in which it announced plans to explore alternatives.
Sources close to the process have said a price tag of $40 per share, or $5.6 billion, on the whole company would earn Pershing a huge payout, but Ackman is not confident that the company would attract such a price.
Some analysts say the stock, which has traded at 26 times expected 2007 earnings -- above the sector's average multiple of 25 and Automatic Data Processing's
Activist investor Ralph Whitworth and his firm, Relational Investors, a Ceridian shareholder, are also pushing for changes at the company.
In the 2006 fourth quarter, Comdata revenue rose 16% to $121.3 million, surpassing Ceridian's expectations. Human Resource revenue increased 3% to $282.7 million, below expectations.
Comdata revenue grew 14% in 2006, while Human Resource posted a rise of 4%.