Three private equity firms are bidding in a limited auction to finance a management buyout of The TCW Group Inc., industry sources said.
And if the deal goes through, it will be executives from the Metropolitan West Asset Management side of TCW who end up running the Los Angeles-based money manager, they added.
Rumors have been circulating for five years that Paris-based Societe Generale Group wanted to unload TCW, which it acquired in 2001, for well over $1 billion.
But a deal could be imminent given that bids for a cash-only transaction are being considered from private equity managers Clayton Dubilier & Rice LLC, Warburg Pincus LLC and The Carlyle Group, said sources who spoke on condition of anonymity.
Amid a fluid environment, one private equity source familiar with the situation who declined to be named noted that CDR and Warburg Pincus no longer appear to be actively negotiating.
Spokesmen for TCW, Societe Generale, CDR, Warburg and Carlyle all declined to comment.
That MetWest executives would run TCW if the buyout occurs is ironic. MetWest, a fixed-income boutique with roughly $30 billion in assets under management, agreed to be acquired by TCW in December 2009 as a replacement for star fund manager and Chief Investment Officer Jeffrey Gundlach, who was terminated that same month.
Earlier that year, Societe Generale rejected Mr. Gundlach's $700 million bid for TCW. Now, however, it appears Society Generale is on the verge of accepting a bid for between $600 million and $800 million.
Marc I. Stern, TCW vice chairman and CEO, is leading the buyout charge, said one source who asked not to be named. Should a deal be consummated, Mr. Stern likely would cede his CEO perch to David Lippman, the former MetWest CEO now serving as TCW's head of fixed income and group managing director, the source said.
Another source said it would be more accurate to say that Messrs. Stern and Lippman were both leading the buyout effort, adding that while Mr. Lippman is the heir apparent, Mr. Stern would continue to have a significant role.