Warburg, TPG team up for GE rail unit-sources

* Final bids for GE rail leasing unit due around June 23

* PE buyers include Warburg, TPG, Cerberus, Apollo-sources

* Warburg, TPG pairing up to make joint bid-sources

* Trinity Industries says not involved in auction

By Soyoung Kim and Paritosh Bansal

NEW YORK (Reuters) – Warburg Pincus and TPG Capital are teaming up to bid for General Electric Co’s railcar leasing business, people familiar with the matter said.

Other bidders for the GE business, which has about $3 billion of assets, include private equity firms Cerberus Capital Management and Apollo Management, these people said.

Dallas-based railcar manufacturer and lessor Trinity Industries Inc, meanwhile, is not involved in the sale process, a Trinity official told Reuters. Trinity had bid for the business when GE tried to sell it in 2008, sources said.

The bidders have been meeting with the management of the GE leasing operation over the past few weeks after submitting initial offers in early May, these people said. Final bids are expected around June 23, they said.

GE hired Morgan Stanley to find a buyer for its railcar leasing arm this year, its second attempt in three years as the U.S. conglomerate trims its GE Capital unit under Chief Executive Jeff Immelt.

Representatives for Warburg Pincus, Apollo and Morgan Stanley declined to comment. GE, TPG and Cerberus were not immediately available for comment.

General Electric wants GE Capital to provide 30 percent to 40 percent of total company earnings, instead of the more than half it generated before the 2008 financial crisis.

Immelt has been refocusing GE on its industrial businesses, which over the last year struck deals worth some $14 billion, most of them in energy infrastructure.

GE is also selling GE SeaCo, a container leasing business, with Deutsche Bank AG advising on that sale.

GE Capital listed the original cost of its railroad rolling stock at $4.3 billion as of Dec. 31, 2010, with a net carrying value of nearly $3 billion.

In 2008, GE tried selling the business in an auction that saw GATX Corp offer more than $3 billion for the unit, but it could not seal a deal because of financing problems as the credit crisis took hold.

It was not clear on Wednesday if GATX is again bidding for the GE business.