Finnish utility Elenia lines up bankers for sale that could be worth $2.7 bln -sources

By Emiliano Mellino and Freya Berry

LONDON, Jan 13 (Reuters) - The majority shareholders of Finnish electricity distributor Elenia Oy have lined up Goldman Sachs and Citi to sell the business, in what could be one of Europe's biggest infrastructure deals this year, two sources familiar with the matter said on Wednesday.

The sale of the company could be worth up to 2.5 billion euros ($2.7 bln) and will kick off in mid-February, the sources said.

Finland's second-biggest electricity distributor is controlled by Goldman Sachs Infrastructure Partners and 3i Infrastructure, who own 45 percent and 39.3 percent, respectively. 3i manages an additional 5.6 percent stake owned by U.S (Other OTC: UBGXF - news) . Pension fund TIAA CREF.

3i's final decision as to whether or not to dispose of its stake will depend on the price offered by potential buyers, a source familiar with the process said.

It (Other OTC: ITGL - news) is unclear whether pension fund Ilmarinen, which owns 10 percent of Elenia, will also sell its stake.

Elenia, Goldman Sachs (NYSE: GS-PB - news) , Citi, 3i and Ilmarinen declined to comment.

The company, which covers more than 100 municipalities in Finland, was previously owned by Swedish state power company Vattenfall, which sold it for about 1.5 billion euros in 2012.

Elenia had annual revenues of 229.7 million euros in 2014 and earnings before interest, taxes, depreciation, and amortization (EBITDA) of 153.9 million euros.

The decision to sell the business follows on from several disposals in recent years of regulated grid businesses by European energy firms seeking to cut debt.

These assets have become increasingly popular among pension funds and other institutional investors seeking relatively safe returns in a low interest rate world.

Finland's Fortum (Other OTC: FOJCY - news) has in the last three years disposed of all of its Scandinavian distribution assets, selling Finland's largest distribution business for 2.6 billion euros in 2013. It sold its Swedish electricity grid for 6.6 billion euros last year, in a deal that valued the company at around 16.6 times earnings before interest, taxes depreciation and amortization (EBITDA).

In both deals the buying consortium included infrastructure investor Borealis, which manages a portfolio on behalf of Canadian pension fund OMERS, and several regional pension funds.

($1 = 0.9203 euros) (Additional reporting by Jussi Rosendahl in Helsinki; Editing by Susan Fenton)