American Capital Sounds Out Buyers for European Arm

LONDON (Reuters) – Struggling private equity house American Capital Ltd (ACAS.O) is sounding out buyers for its European portfolio in a deal that could be worth up to $2 billion, three sources familiar with the situation said.

American Capital is looking to sell European Capital in its entirety, which had assets under management of $3.5 billion at the end of the third quarter 2008, or could split it up, one of the sources said.

The firm has appointed Citigroup as adviser on the process, the source added. Citigroup declined to comment.

“They are out in the market looking to sell on a full portfolio basis,” the source said.

“They are prepared to divide it into sub-portfolios, but they are looking to sell the whole operation,” the source said.

A company official in Europe directed queries to the group’s U.S. operations, which could not be reached for comment.

American Capital has started sounding out secondary firms — buyers of second-hand investor interests in private equity portfolios — but believes parts of the portfolio will also be of interest to private equity buyout firms, the sources said.

By Simon Meads and Victoria Howley
(editing by Douwe Miedema)