UPDATE 2-Deutsche Bahn aims to launch delayed Arriva IPO next year

* CEO says "definitely" wants Arriva IPO in 2020

* Arriva IPO must match book value - sources

* Deutsche Bahn talks of IPO as long ago as 2016

* Talks on Arriva sale have failed (Adds sources on book value, board meeting)

BERLIN, Dec 4 (Reuters) - German state-owned railway operator Deutsche Bahn aims for an initial public offering (IPO) of international passenger transport business Arriva next year, dpa news agency reported, setting a new timetable for the long-mooted flotation plans.

The company would offer a minority stake in Arriva starting in May, dpa reported, quoting Chief Executive Richard Lutz. The rest of the shares would be sold over three years.

"We definitely want to go public next year and then sell over a somewhat stretched-out period," the CEO said.

A Deutsche Bahn spokeswoman confirmed the report but declined to give more details.

Deutsche Bahn, which has talked about an IPO as long ago as 2016 to help reduce debts, had also sought a private sale. But sources said U.S. buyout group Carlyle and others failed to present bids that met expectations.

Two members of supervisory board told Reuters any listing of Arriva would have to match its book value, which Deutsche Bahn's website put at about 2 billion euros ($2.2 billion).

Earlier this year, the Arriva sale was expected to be valued at 3 billion to 4 billion euros.

The board members also said it was still not clear how much Deutsche Bahn would invest in Arriva prior to an IPO and said plans for a listing would not be completed for approval at a board meeting in December.

Arriva, which employs more than 50,000 people across Europe, runs British rail franchises including Northern and the London Overground as well as buses around the country.

Lutz, who has been CEO since 2017, faces pressure to turn around the operational and financial performance of the deeply indebted rail operator.

He said Deutsche Bahn would offer a bond next year, aiming to raise up to 3 billion euros, dpa reported.

($1 = 0.9073 euros) (Reporting by Thomas Seythal and Markus Wacket; additional reporting by Arno Schuetze in Frankfurt; editing by Thomas Escritt and Elaine Hardcastle)