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* Tentative bids for IKB due in mid-April -sources
* HSBC, BNP, SocGen, Santander, SEB likely to bid -sources
* Corporate loans could fetch up to 1.5x book value -sources (Adds valuation, details)
By Arno Schuetze
FRANKFURT, April 4 (Reuters) - Private equity investor LoneStar is expected to receive bids from some largeEuropean banks for corporate bank IKB, one of Germany'shigh-profile victims of the financial crisis, two peoplefamiliar with the transaction said.
IKB was the first German bank to require a bailout duringthe crisis and has become one of the first to be put up for saleduring a health check on Europe's banks this year by regulators.
The bank, known before the crisis mainly as a lender to mid-sized German companies, has described the demands of thebanking industry check-up as "surprisingly harsh".
Potential bidders such as HSBC, BNP Paribas, Societe Generale, Santander andSEB received information packages on IKB in earlyMarch and have been asked to return with non-binding offers by amid-April deadline, the people said.
Some of these banks, which all aim to expand their businesswith medium-sized German companies, are only interested in thecorporate lending activities and not the whole bank, they added.
Lone Star, which owns 91.5 percent of IKB, has allowedbidders to consider buying parts of IKB and will likely ask formore money for its most prized assets.
"Shedding just the corporate loan business would mean thatLone Star pay itself for winding down the remaining assets, likeIKB's leasing business or back-office operations," one of thesources said. The source added that some of the bidders couldattach that part of the business to their own corporate lendingoperations and generate significant benefits.
Any bidder interested only in IKB's crown asset - a roughly10 billion euro book of loans to German corporate clients - mayhave to pay up to 1.2-1.3 billion euros, in line with thevaluation of peers, which trade at 1.5 times book value, anothersource said.
IKB required several bailouts from development bank KfW and the German state after its off-balance sheetinvestment vehicles ran into funding problems in 2007.
Following the rescues, IKB was taken over by KfW, which soldit to Lone Star in August 2008 for 137 million euros.
In December, U.S. investor Lone Star showed it was ready toexit its German banking assets when selling property lenderCorealcredit to Aareal Bank in a342-million-euro deal.
Bankers said a sale of IKB - which posted a profit of 39million euros for the nine-months to December - to a rival witha strong balance sheet could help the German bank pass theEuropean bank health checks.
IKB is the smallest German bank deemed important enough tobe supervised from November by the European Central Bank ratherthan the national regulator. IKB said last year it could meetthe ECB's demands, but it would not be easy.
IKB, HSBC, BNP Paribas, Societe Generale, Santander and SEBdeclined to comment, while Lone Star was not available forcomment. (Reporting by Arno Schuetze; Editing by Tom Atkins and JaneMerriman)
