Toys R Us’ DACH business includes its operations in Germany, Austria and Switzerland.

According to reports, Toys R Us is expecting second-round bids for its DACH operations. The Poland operations are not included but there is an option to include them, revealed a source familiar with the matter.

The process has reportedly been ongoing for a couple of months, with a number of restructuring funds and family-owned companies making approaches. There are rumoured to be several bidders in the process, including a restructuring fund and a family office – though it is possible this is speculative noise being put out with the intent to draw in other names.

Being a restructuring fund, Alteri would also be a logical bidder as it could find synergies with its acquisitions of Versandhaus Walz (2015) and Intertoys Holland (2017), although a spokesperson for Alteri, however, denied any interest in the DACH business.

Sources have volunteered EBITDA estimations for the DACH operations of between EUR 30m and in excess of EUR 40m. Comparable retailers trade at a normal 3x EBITDA multiple, one source stated. However, they added that the company’s IT systems are dated and suppliers are nervous, so TRU TAJ’s noteholders, which provided debtor-in-possession (DIP) financing to the international business, will need to do a deal at any valuation or “they will not have a business”. TRU Taj is TRU’s international subsidiary.

Lazard, who has the overall mandate for the sale of the US operations, is running the DACH process, according to reports, while Evercore is advising the ad-hoc committee of TAJ noteholders. Sources note that in this ad-hoc committee there are six funds represented, which together have “a significant majority”.

Meanwhile, Rothschild is starting to prep the French and Iberia assets for separate sale processes, the first source familiar said.