CORRECTED - UPDATE 1-PAI plans to cut buyout fund in half-source

(Source corrects 80 percent of the votes to 66.67 percent of the votes in fourth paragraph)

* PAI sent formal offer to investors this evening - source

* PAI proposing to cut fifth fund by 2.7 bln euros

* Investors expected to respond on Dec. 3

* Outcome of investors' vote uncertain but PAI confident (Adds details)

By Julien Ponthus

PARIS, Nov 3 (Reuters) - French private equity firm PAI Partners has made a formal proposal to investors to cut its 5.4 billion euro ($7.90 billion) Fifth buyout fund in half, and to change its governance in favor of investors, a source close to the matter said on Tuesday.

"PAI sent its offer to investors this evening," the source told Reuters, adding that a response was expected on Dec. 3.

Any shrinking of the fund, which bought stakes in IT services company Atos Origin (ATOS.PA: Quote, Profile, Research) and building materials firm Xella last year, would echo similar moves by peers TPG [TPG.UL] and Permira [PERM.UL], who have faced pressure from investors keen to reduce their exposure to private equity.