Benettons expect binding offers for WDF by mid-March - sources

By Paola Arosio and Elisa Anzolin

MILAN (Reuters) - Italy's Benetton family expects binding offers for its majority stake in the world's No. 2 duty free operator World Duty Free by mid-March, two sources close to the matter said on Tuesday.

The Benettons, whose business empire ranges from motorway concessions to clothing, are ready to sell their 50.1 percent stake in World Duty Free (WDF) for cash and a small stake in the duty free group.

The Italian travel retailer has a market share of around 8 percent.

Switzerland's Dufry , the sector leader, and South Korea's Lotte Shopping have expressed their interest, two sources said. China's Sunrise Duty Free, which runs shops at Shanghai and Beijing airports, is also among the bidders, one of the sources said.

A potential bid from the Qatari sovereign fund could see Qatar Investment Authority teaming up with a private equity firm, according to the second source.

A third source said that South Korea's Hotel Shilla was looking at the Italian group.

Last month, French media group Lagardere said it was also interested but that WDF's shares were currently too expensive. Its shares have risen about 30 percent since the start of the year, boosted by acquisition expectations.

The eventual buyer would have to launch a bid for all outstanding shares after acquiring the 50.1 percent stake, in line with Italian market rules.

World Duty Free has a market value of 2.66 billion euros ($2.98 billion) and net debt expected to reach 950 million euros by year-end, giving it an enterprise value of 3.61 billion euros.

Dufry and Qatar Investment Authority declined to comment. Sunrise was not immediately available to comment, while in the past Hotel Shilla has declined to comment on the issue.

Gilberto Benetton, who chairs the holding company through which the family holds their stake, said last week that WDF had been approached by several parties interested in the company but had not received any binding offer.

The Benetton family is willing to give up control and supports a merger as it will help the retailer cope with the rising costs of airport concessions and also give it more bargaining power in dealing with suppliers.

(Additional reporting by Francesca Landini in Milan and Pamela Barbaglia in London; editing by Susan Thomas)