MILAN, April 27 (Reuters) - Italy's biggest retail bank Intesa SanPaolo is in advanced talks with prospective buyers of its payments unit Setefi which is worth more than 1 billion euros ($1.1 billion), five sources said.
Italian payments specialists Istituto Centrale della Banche Popolari (ICBPI) and SIA have both submitted firm offers for Setefi, which manages electronic payments for 15 million credit cards, mostly issued by Intesa, the sources said.
A final decision could come as soon as next week, two of the sources said.
Intesa and SIA declined to comment. ICBPI was not immediately available for comment.
The sale, led by Intesa and UBS, would value the company at more than 10 times its earnings before interest, taxes, depreciation and amortization (EBITDA) of about 100 million euros a year, two of the sources said.
Setefi handled 995 million credit card transactions in 2015 worth a total of 68.9 billion euros.
Intesa's payments arm has drawn interest from several heavyweight private equity funds including London-based CVC and Permira which together lost out to a consortium of Bain Capital, Advent and Clessidra in an auction for ICBPI last year, the sources said.
But most of Setefi's private equity suitors have now walked away from the process, two of the sources said.
ICBPI, the Italian bank service provider previously held by cooperative or "popolari" lenders, is keen to boost its presence in Italy as part of the buy-and-build strategy which is being implemented by its deep-pocketed investors, the sources said.
But for Intesa the choice between ICBPI and SIA is proving difficult.
The Italian lender is one of SIA's minority shareholders with almost 4 percent of its share capital.
SIA's leading investors are state-backed Fondo Strategico Italiano (FSI) with 49.48 percent of its shares and infrastructure fund F2i with a 17 percent stake.
On March 11, SIA's Chief Executive Officer Massimo Arrighetti told Reuters he was looking to float the business on the Milan stock exchange in the autumn.
The sources said SIA rsemains interested in the listing project but would only do so after any acquisition of Setefi is completed.
Setefi operates in Austria, France, Germany, Spain, Switzerland and the United Kingdom.
It has been authorised to operate in other European countries including Greece, Portugal, Belgium, Bulgaria, Cyprus, Croatia, Denmark, Estonia, Finland and Ireland.
$1 = 0.8845 euros Additional reporting by Sophie Sassard in London and Massimo Gaia in Milan; editing by Rachel Armstrong and David Clarke