British private equity group 3i has pulled out of the race for Lagan Group's asphalt and quarrying assets as the sale process nears its final phase.
A number of European organisations are still in contention, although certain Irish groups that ran the rule over the assets did not bid.
The FTSE 100-listed 3i is understood to have conducted a serious examination of the Lagan assets but recently withdrew from the process.
A spokesman for Lagan Group declined to comment on the sale, which is being conducted by HSBC. The process is expected to conclude in the coming weeks.
Senior construction industry figures said in private that the French conglomerate Bouygues may have an interest in the process through its road-building division Colas SA, which owns the Cold Chon bitumen business in Galway and Sligo. The Lagan assets might make a good strategic fit with this business, sources said.
Other possible European bidders include Danish group Arkel, which owns quarries in Kildare, Kerry and Cork, and Portuguese group Mota-Engil.
It is believed that some of the assets for sale were themselves acquired from Readymix, so that Mexican-controlled company is not likely to have made a bid.
Millionaire brothers Kevin and Michael Lagan put the assets up for sale in January. But while Lagan Group put an internal valuation of €350 million on its asphalt and quarrying business, the market was expected to underbid that sum by as much as €100 million.
The valuation now under discussion is not known.
At issue in the valuation exercise was the sustainability of profits after the completion of the core road-building elements of the new National Development Plan.
Lagan's 10 Irish quarries have an annual output of more than 3.6 million tonnes. With a combined production capacity of about 2.2 million tonnes of coated material, the group ranks among the largest Irish suppliers of asphalt materials.
The assets on the market contribute about a quarter of the revenues at Lagan Group, whose combined turnover grew 12 per cent in 2006 to €493.91 million. Group operating profits rose 26 per cent to €51.15 million and pre-tax profits rose 39 per cent to €44.21 million.
