Wolseley, the plumbing and building materials distribution group, is in play for a £10 billion bid from private equity bidders.

Cinven, the private equity firm, called off plans earlier this week to mount a formal bid approach for Wolseley after several months of preparation.

A source close to Cinven said: “The idea was brought to us by a bank. We took a look at it. We are not looking at it now.”

Cinven is not ruling out returning for a fresh look at Wolseley, should any other potential bidder emerge for it.

City brokers forecast that other big private equity firms would now dust off their business plans for buying Wolseley and might yet ask Cinven to consider mounting an offer.

Expectations of an imminent bidding war for Wolseley lifted its share price 85p to £14.07 yesterday, a 6.4 per cent rise that added £560 million to its market value now exceeding £8.6 billion. Analysts said that any bid for Wolseley would need to be at more than £15 per share to make its new chief executive, Chip Hornsby, even discuss it.

A Wolseley spokeswoman said: “The company does not comment on market speculation.”

Investment bankers in Gold-man Sachs are thought to have drummed up a business plan for buying Wolseley last November, just as the FTSE 100 company first told investors that it was feeling the effects of a slowing US new housing market and announced that it was cutting 2,000 jobs.

Wolseley last month announced that it was increasing its US jobs cull to 4,000, a 9 per cent reduction of its American workforce, to deal with a slowing US business that now accounts for about 52 per cent of group revenue. The US new housing market accounts for 25 per cent of group revenue.

Cazenove, the broker, has said if investors continue to discount future US housing down-turns, it is “not impossible” that Wolseley will fall into private equity buyers’ hands.

Cinven has spent more than £2 billion buying two smaller European building materials firms over the past 14 months.

Since the start of its financial year on August 1, Wolseley has spent £342 million on 33 bolt-on acquisitions. Wolseley operates under the Plumb Center and Build Center brands in the UK. In the US, it runs Stock, a building supply business, and the Ferguson plumbing business.

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