HSH Nordbank may pick bidder for exclusive talks next week -sources

BERLIN, Jan 12 (Reuters) - The state owners of Germany's HSH Nordbank may decide to enter exclusive negotiations with one of the remaining bidders for the bank next week as the long-running privatisation process nears conclusion, two people close to the matter said.

Private equity groups J.C. Flowers - which owns 5 percent of HSH - and Cerberus have submitted a joint bid with a headline price of more than 700 million euros ($849 million), one of the people said, adding it remained unclear what conditions were attached to the offer.

A rival bid from Apollo was seen as giving the bank a roughly similar valuation, the people said.

HSH, its owners and the bidders, declined to comment or were not immediately available for comment.

HSH became the world's largest lender to the shipping industry in the 2000s but after a sector slump it required a state rescue and is now majority-owned by the states of Schleswig-Holstein and Hamburg.

Hamburg and Schleswig-Holstein are set on Monday to discuss the next steps in the privatisation, which needs to be finalised by the end of February following European Union state-aid rules.

While a sale of only parts of HSH is an option, HSH's state owners are not allowed to absorb any losses if they wind down assets on their own.

Like its peers, HSH has benefited from first signs of recovery in the shipping market in recent months.

Bloomberg earlier reported that the bid of J.C. Flowers and Cerberus had 700 million euro a price tag. ($1 = 0.8248 euros) (Reporting by Klaus Lauer and Arno Schuetze, editing by David Evans)