The proposed sale of Ratiopharm is hotting up and, according to the Financial Times, a former chairman of the German generics drugmaker, has linked up with a private equity firm to join the auction.

The newspaper says that Claudio Albrecht has joined forces with EQT, the private equity arm of Sweden's Wallenberg family, to prepare a bid for the world's fourth-largest generic drugmaker, which has been valued at around 2 billion euros. Other private equity groups are also interested in getting hold of Ratiopharm are thought to include Advent International (in tandem with Goldman Sachs), Permira (which the FT says has teamed up with Hank Klakurka, the former chief executive of Merck Generics), Kohlberg Kravis Roberts and TPG.

It has also been reported that BNP Paribas and Commerzbank, the German bank running the sale on behalf of VEM Vermoegensverwaltung, the investment arm of the Merckle family, have agreed to make loans available to private-equity bidders in the auction. By committing to provide debt before a deal is agreed, this move is likely to have the effect of driving up the price and encouraging more competition among bidders.

A number of pharmaceutical companies are, of course, also interested in getting hold of Ratiopharm and the list of potential bidders includes generics specialists such as Teva, Mylan, Actavis, as well as pharma giants Pfizer and Sanofi-Aventis. The FT says that bidders have been asked to submit non-binding offers by December 3, and there is expected to be a fourth round of bidding before the winner is announced.