About 10 buyout houses are preparing to make indicative bids on Monday for Inchcape Shipping Services (ISS), the $700 million-plus port and shipping agent owned by Dubai World's investment arm Istithmar.

The keen interest highlights the ongoing appeal of so-called secondary buyouts, where financial investors sell each other portfolio companies, despite concerns that previous owners may have already withdrawn much of the value in a company.

Dubai World, the debt-laden conglomerate, is in the throes of a $9.5 billion government rescue. It could sell more assets, although its chief restructuring officer has pledged to avoid a 'fire sale' and Dubai insists it can fund the rescue.

In March Dubai unveiled a $9.5 billion rescue plan for Istithmar's parent, the debt-laden Dubai World.

Bidders are drawn by the asset-light and cash-generative nature of ISS - which helps ship owners clear customs, unload, refuel and repair their ships - and by forecasts of continued double-digit earnings growth, people familiar with the matter said.

'It's a good growth business, it's proven its stability during the downturn, it's got a good management team and it's an existing borrower,' one person who has looked at ISS said.

'It's got all the things that make secondary buyouts much easier' than acquiring public companies, this person added.

ISS had earnings before interest, tax, depreciation and amortisation (Ebitda) of about $70 million in 2009, and is likely to earn closer to $80 million this year, some of the people said.

With a staple debt package of about 5 times Ebitda available, and bidders willing to pay about 10 times in total, that means bidders are likely to offer some $750 million.

Advent International, Bridgepoint, Cinven, KKR, Montagu Private Equity and TPG were among potential bidders, the people said.

Apax and Carlyle are also likely to bid, some of the people said, but they added that the interest of Charterhouse, another early suitor, appears to have waned.

All the private equity firms either declined to comment or did not return requests for comment. ISS officials did not return requests for comment. Istithmar had no immediate comment.

Most bidders have already met with the management of ISS, which is led by chief executive Claus Hyldager, the people added. ISS staff have a minority stake in the business.

Secondary buyouts, including those of Pets at Home, Ambea, Sebia and LGC, have dominated recent European private-equity dealmaking.

But some potential deals have collapsed as sellers found they could refinance in the debt markets instead or buyers balked at asking prices. TPG recently ended exclusive talks with Oaktree to buy flexible packaging maker Nordenia.-Reuters