June 8, 2018 / 1:10 PM / 15 days ago

Pamplona in lead to buy German home shopping TV network HSE24 -sources

FRANKFURT, June 8 (Reuters) - Buyout group Pamplona is viewed as the front runner to buy German home shopping TV network HSE24 from investor Providence, after other suitors dropped out, two people close to matter said.

Pamplona remains in the race, while Apax and BC Partners have dropped out of the auction for HSE24, which is expected to be valued at more than 1.5 billion euros ($1.8 billion) including debt, the people said.

An Asian suitor has also shown interest in the company, but has not bid aggressively, the sources added.

A flotation of HSE24 on the Frankfurt stock exchange is seen as a fallback option if the talks with Pamplona fall apart, they said.

Providence, Pamplona, Apax and BC Partners declined to comment.

Bankers have been working on debt financing of almost 1 billion euros to back the potential sale - or around 6.25 times HSE24’s expected 2018 core earnings (EBITDA) of 140 million euros, including undrawn facilities.

Founded in 1995, HSE24 competes with companies such as QVC, part of John Malone’s Liberty Interactive, which has been a consolidator in the sector.

An 85 percent stake in HSE24 - which markets more than 20,000 different products to customers each year in Germany, Austria, Switzerland, Italy and Russia and in 2016 posted sales of 754 million euros - was sold to Providence for 650 million euros in 2012.

$1 = 0.8509 euros Reporting by Arno Schuetze; Editing by Edward Taylor and Mark Potter

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