Rexel, the French electronics distributor, could be floated in what would be the largest private-equity backed IPO seen so far.

The move, expected to raise up to €4 billion (£2.7bn), would come two years after the world's biggest electrical equipment wholesaler was taken private by a consortium including Eurazeo, the French investment company, Clayton Dubilier & Rice, the US buyout group, and the private equity arm of Merill Lynch.

The flotation, which could value Rexel at between €7 billion and and €8 billion, is expected to happen in the first quarter of 2007, Financial News reported.

It would beat the £1.2 billion raised in 2003 by Yell, the directories business spun out of BT, in Europe's largest private equity-backed flotation so far. It would also exceed the world's largest private-equity backed float, Japan’s Shinsei Bank’s $2.4 billion (£2.4bn) IPO in 2004.

Rexel last month reported a 37 per cent surge in second-quarter earnings before interest, tax, depreciation and amortisation to €150.7 million and said margins were expected to improve for the full year.

Over the summer the group completed the acquisition of GE Supply, the electrical distribution business of GE Consumer & Industrial, a business unit of General Electric for $725 million.

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