German retail company Metro AG is looking to float up to a quarter of its Cash & Carry Russia business in London by spring next year. 

Metro AG is the fourth-biggest retailer in the European region. It is also the fifth-largest retailer in the world in terms of revenue, according to professional services firm Deloitte.

Reuters sources said that the possible initial public offering (IPO) would value the business unit at EUR4 billion (USD5.4 billion) or more. 

Metro AG will be competing against local rival Lenta, which is also gearing towards a public offering in London next year. Russian hypermarket chain Lenta is backed by state-run VTB Bank and private equity firm TPG Capital. 

Reuters, quoting a capital markets banker working with Metro on the IPO plan, said that the company would only sell a 25% stake at the most. 

Another source said that the listing would take place in London, with a secondary listing possibly in Moscow. The public float could happen anytime between the end of the first quarter and the start of the second quarter of 2014.

Other sources told Reuters on Tuesday that Russia's Sberbank Rossii and investment bank Goldman Sachs & Co. were likely to work on the IPO.