The planned sale of ParexGroup has stalled after bids failed to meet price expectations of about €1 billion ($1.37 billion), sources told Reuters on Monday. Parex is a subsidiary of French construction company Materis Paints SAS.

According to the report, Parex attracted a clutch of bidders after Materis' private equity owner Wendel SA launched a sale process through investment banks BNP Paribas and Rothschild in August. By November, the sale had become a two-horse race between investment firms CVC Capital Partners and Pamplona Capital Management. 

An announcement on the successful bidder had been expected by now. However, the process has stalled because the highest bids were just about €800 million, Reuters sources said.

Bankers had been preparing debt packages to back a Parex buyout for up to €500 million. This is about 4.5 to 5.5 times the industrial mortar business' approximate earnings before interest, tax, depreciation and amortization (EBITDA) of €99 million, the report said.

Wendel acquired Materis through a leveraged buyout in 2006. It has been seeking to sell some assets in a bid to reduce the company's €1.9 billion of debt and cut its overall exposure to the construction sector, Reuters said.