SYDNEY, March 29 (Reuters) - U.S. private equity firm KKR & Co LP is preparing a potential consortium bid for Australia's Quintis Ltd backed by the sandalwood plantation group's managing director, a source said.
The source, who was not authorised to speak publicly, told Reuters that a consortium was being formed with the aim of presenting a formal proposal to the Quintis board within weeks.
"Several parties are stepping forward," the source said.
Quintis, formerly known as TFS Corp, has Indian sandalwood plantations; oil from the trees is sold to India and China for fragrances, cosmetics and medicinal uses.
Quintis Managing Director Frank Wilson, who owns about 13 percent of the company, on Tuesday said he would resign to consider making a takeover offer alongside an unnamed group.
KKR has a controlling stake in Santanol Group, which owns and operates Indian sandalwood plantations in the same part of Western Australia as Quintis. Combining the operations could result in cost savings, the source said.
Quintis, which had a market value of A$487 million ($372.07 million) at Tuesday's close, is one of the last remaining publicly-listed managed investment schemes in Australia.
The collapses of Timbercorp Ltd and several other large forestry investment schemes, starting in 2009, drew widespread criticism of an investment model which frequently involved small investors borrowing money for high-risk operations.
Quintis lost 24 percent of its value last week after the publication of a highly negative report by short-seller Glaucus Research Group.
A spokesman for KKR declined to comment. A Quintis spokesman said the company had no immediate comment. ($1 = 1.3089 Australian dollars) (Reporting by Jamie Freed; Editing by Andrew Hay)