The world's top chemicals distributors, including Germany's Brenntag, are circling Belgium-based Azelis, three people familiar with the matter said. Rival chemicals distributors Univar and Nexeo Solutions, the former distribution arm of Ashland, are also interested in buying Azelis, which is owned by British private equity firm 3i Group, the people said.

Reuters reported in March that London-listed 3i had hired Bank of America Merrill Lynch to sell Azelis, which handles sales and development of the Mirasil cosmetics line and distributes food and beverage flavorings, such as a recently launched vegetarian bacon flavoring.

3i is aiming to run a tight auction process, in which a small number of potential trade buyers will soon be selected to bid for the business, one of the people familiar with the sales process said on Tuesday.

The private equity group, which bought Azelis in 2007 in a €315 million ($447 million) deal, values its businesses conservatively and often sells at a big premium to asset value. It held the Azelis equity at £193 million pounds ($314 million) at the end of September, which with debt of about €300 million taken out in 2007, could give Azelis an enterprise value in excess of €500 million.

"This valuation is not out of this world," a source close to the seller said.

While there are no bidders from the private equity sector, the three bidders have buyout firms as their main shareholders.

Germany's Brenntag, which says it is the world's biggest chemical distributor, was floated by BC Partners a year ago. The private equity firm retains a 36% stake.

Ashland's distribution business was bought by TPG last year for $930 million and renamed Nexeo last month. Univar is co-owned by Clayton, Dubilier & Rice, and CVC.

Based on Brenntag data, Univar and Nexeo (then Ashland) are the world's No.2 and 3 distributors respectively - while Azelis is No.3 in Europe.

Azelis operates in 26 markets across Europe and has offices in Shanghai and Mumbai, serving more than 50,000 customers with chemicals for paints and polymers for plastics manufacture. It had sales of €987 million in 2009 and earnings before interest, tax, depreciation and amortization of €44 million, according to the company's website.

3i, Brenntag and Univar declined to comment. Azelis and Nexeo Solutions were not immediately available for comment.