Private equity firms looking to acquire a €1.4bn ($1.9bn) stake in German state-owned bank HSH Nordbank are set to face competition in the auction by an unnamed financial services group based in Germany.

WestLB, a German regional state bank, has placed its 27% stake on the market, and has attracted strong interest from investors believed to include US private equity firms Hellman & Friedman, JC Flowers and Cerberus Capital Management.