Essent Milieu Auction Down To Two Bidders

(Reuters) – Two bidding groups have withdrawn from the auction of Dutch utility Essent’s waste management unit, sources familiar with the matter said on Thursday.

The sale of the unit, Essent Milieu, is in its second round and had been one of the few deals to draw private equity interest, as buyout houses struggle to achieve their targeted rates of return on debt-financed deals.

However, BC Partners [BCPRT.UL], the British private equity firm, has dropped out of the process, one of the sources said.

A second source said a consortium of Deutsche Bank’s RREEF Alternative Investments and Waste Management Inc’s (WMI.N) Wheelabrator Technologies Inc. had also withdrawn.

Earlier this year banking sources said Essent hoped to fetch more than 1 billion euros ($1.33 billion) for the unit.

Banking sources have previously told Reuters Loan Pricing Corp. that French private equity firm PAI, U.S. waste firm Covanta (CVA.N) and the “Orange” consortium, which includes infrastructure funds linked to NIBC and Fortis, were involved in the auction.

Essent has also agreed to sell its much larger production and delivery arm to Germany’s RWE (RWEG.DE) — but some doubt was cast over the deal last week when the parliament of the province that is Essent’s biggest shareholder voted against the plans. [ID:nLR448179]

BC Partners and RREEF declined to comment. Essent, Waste Management Inc., Covanta, and PAI did not immediately respond to requests for comment.

ING and Credit Suisse are advising Essent on the sale. Credit Suisse also declined to comment. (Reporting by Quentin Webb and Simon Meads; Editing by Rupert Winchester)