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(Updates with details throughout)
FRANKFURT, May 31 (Reuters) - Metals recycling group Befesa is planning to list on the Frankfurt stock market, potentially valuing the group's equity at 1-1.2 billion euros ($1.1-1.3 billion), two people close to the matter said.
Befesa, which says it has almost half of Europe's steel recycling market and the market for recycling aluminium residues, is expected to announce its intention to float in June, with its planned market debut taking place four weeks later, the sources told Reuters on Wednesday.
The company is hoping to benefit from buoyant stock markets and a nascent recovery of global equity listings after a 2016 slump and would be the third listing in Germany in the second quarter alongside restaurant chain Vapiano and online food takeaway firm Delivery Hero.
Shares worth about 450-500 million euros will be offered, including 100 million in new shares, while Befesa's owner, buyout group Triton, will also sell some stock, the sources added.
Santander, Commerzbank, Berenberg and Stifel are acting as bookrunners alongside global coordinators Goldman Sachs and Citi, they said.
Triton declined to comment, while the banks also declined to comment or were not immediately available for comment.
Triton is also weighing an outright sale of Befesa as an alternative to the IPO. Triton has offered Befesa to potential buyers and may opt for the sale if that proves a better deal.
Befesa, which is headquartered in Luxembourg and was listed until it was bought by Spain's Abengoa in 2000, on Tuesday posted adjusted earnings before interest, tax, depreciation and amortization of 151 million euros on sales of 640 million euros in the year to the end of March.
It had net debt of 460 million euros and is hoping to reap a valuation including debt similar to that of peers.
Waste Connections, Stericycle, US Ecology , Umicore and Ecolab trade at 11-15 times their expected core earnings.
Befesa, which sees itself as market leader in hazardous waste recycling services to the steel and aluminium recycling industries, cited a strong business in its core steel dust and aluminium salt slags units.
Befesa specialises in recycling steel dust from the steel and galvanizing industry and salt slags from the aluminium industry. Abengoa sold the company to Triton in 2013 for 850 million in cash, or 1.1 billion euros including debt.
Iron, zinc and aluminium prices have picked up substantially since October. ($1 = 0.8938 euros) (Reporting by Arno Schuetze; Editing by Tom Sims and Alexander Smith)