One group formed by Apax and KRR, and the other by Blackstone and CVC Capital Partners, are working on competing offers for the France Telecom and Deutsche Telekom joint venture, according to people with knowledge of the talks speaking to the Financial Times.
Both parties hope to raise a debt package of up to £7 billion with the remaining £3 billion coming from their own equity.
An option being considered is to allow France Telecom and Deutsche Telekom to keep a 15% to 20% stake in the company to help reach the acquisition price, according to the sources.
Lenders are said to be looking at the issuance of a US high-yield bond as part of the debt package to fund a bid to utilise stronger US credit markets.
Talks are described as being in the advanced stages but are limited until the firms gain access to detailed financial information about the company.
France Telecom and Deutsche Telekom are believed to prefer an IPO of EE rather than selling the operator but would consider a straight sale if the right offer was on the table, according to FT sources.
The EE owners are reportedly weeks away from appointing banks for a 25% listing before the fourth quarter of 2013.
