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Shareholders in Auna, the Spanish telecoms group being auctioned for about €12bn ($14.5bn), are understood to have received at least one offer for the group above their asking price.
Banco Santander, an Auna shareholder, has previously said that a price of less than €12.5bn would be insufficient.
However, a more cautious debt market environment in recent months could cause shareholders to revise down their asking price if the private equity bidding teams are unable to raise as much debt finance to fund a leveraged buy-out.
On Tuesday morning Merrill Lynch, acting for Auna's shareholders, received an offer for the entire business from Kohlberg Kravis Roberts, and partners Goldman Sachs and BC Partners, a person close to one of the bidders said.
It is competing with another bid, lodged on Monday evening, which is split in two parts. People connected with this offer said that when combined it values Auna at just over €11.5bn.
Providence has linked with Blackstone, Carlyle, and Permira to bid for Auna's mobile business, Amena. This part of the bid is thought to be worth about €9bn.
Providence has also teamed up with Ono, another Spanish telecoms group, to buy Auna's fixed-line and cable assets, with a bid of about €2.5bn. Additional equity for the fixed-line bid could be provided by Thomas H Lee, JPMorgan Partners and Quadrangle.
A person close to the auction said that Merrill Lynch had received an offer above the asking price and another below it.
“It is likely to be three or four days before any decision is made,” the person said. “They want to agree contracts first because it's pointless to have the right price if you can't agree contracts.”
The private equity teams involved with Ono are betting that they may be able to get to a higher price because they have partnered a trade purchaser that could gain from synergies in the event of a deal.
One of the bidders said that offers tabled for Auna might not be as aggressive as they would have been three months ago, citing weakness in the debt markets.
“Some people take the view that there are deals out there that are over-priced,” he said, adding that some investors had decided against taking part in the debt finance package being sold to finance the LBO of Wind, the Italian telecoms group bought for €12.1bn. “Wind is unlikely to get done this side of the summer break,” he said.
Auna's other main shareholders are Endesa and Union Fenosa, the electricity groups.