(Bloomberg) -- CVC Capital Partners and EQT AB are among private equity suitors that have been shortlisted in the bidding for a stake in Aareal Bank AG's software business, people with knowledge of the matter said.
The German real estate lender has also invited Advent International to make a final offer for the stake in its Aareon unit, the people said. A deal could value the business at as much as $1 billion, according to the people, who asked not to be identified because the information is private.
Bain Capital and Hg were also among parties that earlier submitted indicative offers for the business, according to the people. Aareal Bank is asking for final bids to be submitted in August, the people said.
The software business has become more important to Aareal Bank's bottom line this year, after the lender booked provisions for potential losses due to the economic fallout from Covid-19.
Institutional real estate buyers use Aareon's software to manage multiple investment properties. Aareal Bank has been under pressure from activist investors pushing it to consider a full divestment of the business.
Aareal Bank has been discussing selling a significant minority stake in Aareon, according to the people. The valuation it achieves could vary depending on the exact stake size and governance rights it's willing to offer, one of the people said.
There's no certainty the suitors will proceed with binding offers, and other potential buyers could emerge, the people said. Representatives for Aareal Bank and the bidders declined to comment.
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