Three Offers Made For Pirelli Cables Unit

Shortly after Pirelli announced that it would build a new specialist cable manufacturing plant in Brazil, it has emerged that Pirelli has received three binding bids for majority stakes in its cables business. Goldman Sachs’ and Texas Pacific Group’s offers are seen as the frontrunners for the purchase, a source familiar with the situation told Dow Jones Newswires.

The two offers are both said to be “quite complete” and each values the business at around 1.4 billion euros, but they are articulated in different ways, the source reported. A third offer, from Bain Capital Inc is said to offer a lower valuation. The deadline for binding offers has closed and Pirelli is expected to take around a week to review them.

Pirelli’s energy cable business doubled its net profit in 2004 to 78 million euros while revenue rose 9.5 per cent to 2.888 billion euros from 2.637 billion euros in 2003. The telecomunications cable unit narrowed its net losses by 18 million euros to 56 million euros, while sales rose to 430 million from 427 million euros. The two divisions had combined net debt of 484 million euros at the end of 2004.