• Kuoni shares advance as much as 7.1 percent in two days
  • Company's market capitalization is about $1.2 billion

EQT Partners AB has emerged as a strong contender to buy Swiss travel services company Kuoni Reisen Holding AG, according to people familiar with the matter.

The Swedish buyout firm is competing with other financial investors to take Kuoni private, said the people, who asked not to be identified because talks are confidential. Kuoni hasn’t made a final decision on whether to sell, the people said. It has a market value of about 1.2 billion francs ($1.2 billion). The company said Tuesday it received preliminary approaches from third parties for a possible offer, without naming them.

Kuoni has announced job cuts and a management shakeup as it works to turn around its money-losing Global Travel Services division. The company said in November it had replaced its chief executive officer and that the board had proposed eliminating voting-rights limits in a move that analysts said would make the company easier to take over.

Discussions with possible bidders are at a preliminary stage and there’s no certainty an offer will be made, Kuoni said, adding it’s considering all other options. Representatives for EQT declined to comment.

Kuoni shares rose 1.7 percent to 294 francs as of 9:23 a.m. in Zurich Tuesday after reaching its highest intraday price since June. The stock is little changed over the past 12 months.

There’s a risk the board wouldn’t agree with Kuoni’s shareholders on a takeover, Michael Romer, an analyst at J. Safra Sarasin, wrote in a note to investors, keeping his neutral recommendation on the stock. Kuoni would be better off splitting up its assets, wrote Jean-Philippe Bertschy, an analyst at Bank Vontobel.

Kuoni is working with financial advisers and has attracted interest from private equity firms including BC Partners, Permira Advisers and Partners Group, Swiss newspaper Finanz und Wirtschaft said last month.

EQT, the buyout firm founded in 1994, has grown into one of mainland Europe’s biggest private-equity shops with about 29 billion euros ($31 billion) in assets.

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