A spokesperson for Primonial said that it is considering bringing in new investors for the distribution business, while a deal for the remainder of the group would be sought later with a "good international partner".

The company, which oversees 47 billion euros ($51.84 billion) in assets and is backed by British buyout house Bridgepoint, is working with advisers at Rothschild & Co on the plans, people familiar with the matter told Reuters.

A sale process for the smaller wealth management distribution unit is expected to begin in the coming months, two of the people, speaking on condition of anonymity, said.

The unit oversaw about 12 billion euros in assets at the end of December and offers investment products through a network of financial consultants as well as online.

Rothschild has also been retained to advise on options for the group's core real estate division Primonial REIM, but a transaction is more likely next year, one of the people added. Primonial REIM managed 35 billion euros of investments in 2022.

Analysts and policymakers have flagged the commercial real estate sector as a potential pocket of financial stress, as a result of higher interest rates and lower occupancy levels since the COVID-19 pandemic.

The sale plans follow Primonial's disposal of its La Financiere de l'Echiquier (LFDE) unit to La Banque Postale earlier in the year. The unit managed around 11 billion euros in assets at the end of December.

Bridgepoint acquired a majority stake in Primonial in 2017 for an undisclosed sum and later struck a deal with France's Latour Capital to jointly hold 70% of the group. Societe Generale also owns a stake in the group through its insurance arm.

In 2021, the shareholders agreed to sell Primonial's real estate and distribution businesses, alongside a 15% stake in LFDE, to property developer Altarea for up to 2.13 billion euros, including an earnout component.

However, the buyer called off the deal last year, arguing that certain conditions had not been met "in terms of substance, form and timing".

The parties have since been locked in a legal dispute, with Altarea seeking redress through a Paris court in the amount of 150 million euros, according to a press release.

Primonial's shareholders are asking Altarea for 700 million euros in compensation, one of the people said.

($1 = 0.9066 euros)

(Reporting by Pablo Mayo Cerqueiro and Amy-Jo Crowley in London; Editing by Elisa Martinuzzi and Sharon Singleton)

By Pablo Mayo Cerqueiro and Amy-Jo Crowley