* I Squared Capital, KKR, Allianz among bidders - sources
* Aims to sell 40-60 pct stake in new entity - sources
* Entity may be valued 1.9-3.8 bln euros - source (Recasts story, adds details, background)
By Gwénaëlle Barzic and Pamela Barbaglia
PARIS/LONDON, Oct 3 (Reuters) - Debt-laden telecoms and cable group Altice Europe ATCA.AS has received about ten bids to buy part of its French fibre broadband business, two sources close to the matter said on Wednesday.
Financial investors including I Squared Capital, KKR KKR.N , Macquarie Group MQG.AX , Allianz's private equity arm ALVG.DE and Ontario Municipal Employees Retirement System have made indicative bids for a stake in the business, the sources said.
The aim is to sell between 40 and 60 percent of a newly created entity, which could be valued in total at between 1.9 billion euros and 3.8 billion euros ($2.2-4.4 billion), one of the sources said.
The move mirrors a previous transaction by Altice Europe, in which the group decided to sell part of its French and Portuguese telecom towers businesses following a strategic shift by majority owner Patrick Drahi. inviting investors to look into some of its non-core assets, Drahi is seeking to share the investment burden and reduce Altice Europe's 32 billion-euro debt pile.
With a costly roll-out of its fibre optic network in France and fierce competition in broadband, Altice Europe is counting on fresh money to speed up the roll-out of its fixed network outside large cities and meet targets given to regulators.
Shares in the company rose sharply on Wednesday after Bloomberg News first reported that private equity firms had expressed an interest in acquiring the fibre asset.
"Altice Europe has undertaken a strategic review of its fibre infrastructure to further accelerate its deployment and is exploring financial partnerships," Altice Europe said later in a statement.
The company added a final decision about a transaction had not yet been taken.
Altice Europe shares closed up 1.67 percent. They are up about 44 percent so far this year, valuing the Amsterdam-listed holding company at about 3.7 billion euros.
A sudden loss of confidence by investors in Drahi's commercial results in France caused a steep fall in the stock about 10 months ago, triggering the departure of the chief executive, a strategic turnaround plan and the separation of Altice's European and U.S. divisions.
First round bids for Altice Europe's fibre asset were submitted about two weeks ago, one of the sources said.
Meetings will take place between management and bidders until the end of October, the other source said, adding a final round of bidding is expected at the end of November.
($1 = 0.8650 euros)