Four food firms prepare bids for British cereal maker Weetabix: sources

America's third-biggest cereal company, Post Holdings , and the UK's Associated British Foods are among a group of four bidders vying for British cereal brand Weetabix, sources familiar with the matter said on Friday.

The 84-year-old business could fetch at least 1.5 billion pounds ($1.88 billion), based on a valuation of more than 11 times Weetabix' core earnings, the sources said.

Weetabix, owned by China's Bright Food, has also attracted interest from Cereal Partners Worldwide (CPW), a joint venture between Nestle and General Mills , and Italian pasta maker Barilla, the sources said.

The parties are working to put the finishing touches to their offers which are due in next week, said the sources, who declined to be identified as the matter is private.

Weetabix, ABF, and Nestle declined to comment, while Bright Foods, Post, Barilla and General Mills were not immediately available.

Reuters exclusively reported on Dec. 20 that state-owned Bright Food had hired Goldman Sachs to run an auction for the well-known British brand which had earnings before interest, tax, depreciation and amortization (EBITDA) of 130 million pounds in 2016.

The bidders have been asked to submit non-binding offers ahead of a deadline of next week, the sources said, adding that private equity investors had not been invited to the process as they would struggle to compete against industry players who can reap synergies from the combination.

Post's cereal brands include Cocoa Pebbles, Raisin Bran and Grape Nuts. ABF - which trades on a multiple of 10.75 times its EV/EBITDA - owns Jordans and Dorset cereals in the UK as well as Kingsmill bread and Mazola corn oil.

Barilla is best known for its pastas and sauces, but also makes Wasa crispbread. Cereal Partners Worldwide sells General Mills brands, such as Cheerios.

Bright Food took control of Weetabix from private equity firm Lion Capital in 2012.

The cereal industry has continued to struggle since then from mounting competition from other breakfast options like yogurts and smoothies and a shift away from gluten and wheat.

(Reporting By Pamela Barbaglia; Editing by Elaine Hardcastle)