Private equity groups have emerged as favourites to seal a deal for Oriental Brewery, according to reports, but analysts believe Anheuser-Busch InBev will have to drop its original asking price.

Private equity groups KKR and Affinity Equity Partners were cited as two frontrunners in the bidding for Oriental in a report by Bloomberg today (17 April), citing sources close to the situation. It said that up to seven banks have backed KKR's bid with capital of up to $900m.

Another report today, by Dow Jones, cited an unnamed Lotte Group executive as saying that Lotte is no longer at the bidding table, due to the high asking price put forward by Anheuser-Busch InBev.

A-B InBev has not publicly announced that it is to sell Oriental Brewery. The Belgium-based brewer told just-drinks last week that, although it is seeking to dispose of assets, it will not comment on which ones.

Analysts believe a sale of Oriental, which is South Korea's second largest brewer, is drawing near. 

Gerard Rijk, analyst with Netherlands-based ING, told just-drinks today that the sale process appears to be "coming to the end". He said that Oriental may sell for around US$1.6bn, lower than A-B InBev's initial asking price, which is thought to have been around $2bn.

A-B InBev said early this year that it would need to dispose of assets in order to raise $3.5bn to help pay off a $7bn bridge loan, taken out to help InBev fund its $52bn takeover of Anheuser last autumn.

However, the firm said in February that better-than-expected cost savings from the deal has reduced pressure on it to sell. The group also has the option of delaying repayment of the bridge loan for an extra year, until November 2010.

Rijk said that A-B InBev has been "doing everything it can" to show that it is not forced to sell.

Trevor Stirling, analyst with Sanford Bernstein, told just-drinks today that it remains difficult to value Oriental due to uncertainty over the group's most recent figure for annual EBIT, or operating profit.

He said that A-B InBev may be unwilling to accept a price below 10 times Oriental's EBIT.