Other bidders in the fray are U.S. leveraged buyout firms Blackstone Group, Apollo Global Management and J.C. Flowers & Co, banking sources and the Journal, which cited sources familiar with the deal, said.

The deadline for the four bidders to submit offers is February 11.

A full takeover may be unlikely given the troubled bank’s exposure to risky sovereign debt and a big need for funds.

China Development Bank, which has done some preliminary due diligence on the lender, may proceed cautiously and seek a minority stake or a corporate tie-up, sources told Reuters.

It already has a tie-up with another German Bank, HSH Nordbank.

The state-owned lender is seeking to beef up its deposit network and has shown up at other German bank auctions, underscoring its determination to expand its banking footprint.

WestLB has a strong foothold in lending to Germany‘s mid-size companies, a big project financing business and also a strong capital markets business.

Partially owned by the German state of North Rhine-Westphalia and local savings banks, it has been put on the block at the request of the EU as a condition for regulatory approval of state aid granted in the financial crisis.

Deputy German Finance Minister Steffen Kampeter said last week the government expects a deal to be reached on the future of the lender by a February 15 deadline set by the European Union.

Analysts and investment bankers have said that while the sale of parts of WestLB could go through, they gauge a sale of the complete bank as unlikely.

Morgan Stanley is advising WestLB on the sale.

http://www.reuters.com/article/2011/01/30/us-cdb-westlb-idUSTRE70T08Y20110130