Three peers of Europe's biggest bathroom equipment maker, Grohe , submitted final offers for the private-equity owned company by a Friday midnight deadline, three sources familiar with the deal told Reuters.

Grohe's owners, TPG Capital and the private equity arm of Credit Suisse are selling the group in a so-called dual track process, which includes the option of floating it on the stock exchange.

They may launch the initial public offering within the next couple of weeks, while continuing to talk to possible buyers to retain competitive tension in the sales process and reap the highest possible price, two of the sources said.

A potential stock market listing would likely take place by mid-November, they said.

The sellers had originally been hoping for a valuation up to 4 billion euros ($5 billion) in equity and debt. That would have been in line with the valuation of Swiss peer Geberit , which trades at 14 times earnings before interest, taxes, depreciation and amortization.

However, Geberit, Japan's Lixil <5938.T> and Brazil's Duratex have made final bids valuing the German company at no more than roughly 3 billion euros, two of the sources said.

They added that the bids came in below the 3.2-3.5 billion euros that of one of IPO organizers has signaled the group could be valued at in a flotation.

U.S.-based Fortune Brands has dropped out of the auction, while two private equity groups have also submitted final offers, one of the sources said on Saturday.

TPG and Credit Suisse bought Grohe for 1.5 billion euros in 2004 from BC Partners, a transaction that sparked criticism of private equity investors in Germany.

The sale of Grohe could be one of the largest European private equity sales this year along with BC Partners' acquisition of German publisher Springer Science and CVC's purchase of German energy-metering firm Ista .

Grohe, its owners and their advisers - Credit Suisse and Goldman Sachs - as well as Geberit, Lixil and Duratex declined to comment. Fortune was not available for comment.

Analysts say that buying Grohe could be a stretch for some of the company's smaller peers: Duratex has a market capitalization of $3.5 billion and Lixil's is $6.6 billion.

In the first half of 2013, Grohe increased its adjusted Ebitda by six percent to 141 million euros, while sales rose 5 percent to 730 million euros.

(Reporting by Arno Schuetze; Editing by Ron Popeski)