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* Majority stake in food chain Kudu for sale - sources
* More than 40 potential bidders were approached - sources
* Business valued at between 1-1.5 bln riyals - source
* HSBC advising on stake sale - sources
By David French and Dinesh Nair
DUBAI, June 19 (Reuters) - A majority stake in Saudi fastfood chain Kudu has been put up for sale and private equity firmKKR is among the bidders, four banking and industrysources said on Wednesday.
Saudi Arabia is the largest Gulf Arab economy and there hasbeen increasing interest among international investors in thekingdom's booming consumer sector.
Riyadh-based Kudu, which operates more than 200 restaurantsin the kingdom, is owned by four individual shareholders,including chairman and chief executive Abdulmohsen Bin AbdulazizAl Yahya, according to data from Zawya, a Thomson Reuters unit.
The company, founded in 1988, has grown rapidly in recentyears and is expected to record a net income of nearly 100million riyals ($26.7 million) this year, one of the sourcessaid.
Based on a valuation of 10-15 times earnings, Kudu may bevalued at between 1 billion riyals to 1.5 billion riyals, asecond source said.
Kudu officials were not immediately available to comment.Several calls to the company's Riyadh headquarters wentunanswered. The sources spoke on condition of anonymity as theinformation is not public.
The long-term outlook for the Saudi food and agriculturesector remains strong, with growth supported by a young andgrowing population and the expansion of firms into new segments,a June 19 report from Saudi-based NCB Capital said.
Coca-Cola Co paid $980 million in December 2011 for a50 percent stake in Aujan Industries, one of the largestbeverage companies in the Middle East.
Citigroup Inc's venture capital arm and Dubai-basedLevant Capital bought a $100 million controlling stake in SaudiArabian supermarket chain Al-Raya For Foodstuff Co last year.
The sale of the Kudu stake was triggered by strategicdifferences between the shareholders, three of the sources said.About 30-40 percent of the company is owned by two brothersAbdulaziz Abdulrahman al-Modeimegh and Mohammed Abdulrahmanal-Modeimegh, who are not selling their stake, the sources said.
"It's a stable business now and valuations are expected tobe high. The advisors have reached out to a wide number ofparties and it will be interesting to see if the sale goesthrough," said one of the sources, a senior Saudi-based privateequity executive.
A bidding process for the stake has been initiated, withHSBC Holdings arranging the sale, all four sourcessaid. The bank declined to comment.
The lender reached out to more than 40 interested partiesfor the stake sale, including private equity firms includingKKR, Carlyle Group and strategic investors, said two ofthe sources, who are familiar with the plan.
KKR and Carlyle both declined to comment.
Washington-based Carlyle has decided not to bid for thestake, the Saudi-based source said. In 2011, Carlyle bought a 42percent stake in a Saudi-based food franchise operator that runsDomino's Pizza and Wendy's restaurants in the Middle East andNorth Africa.
