NEW YORK (Reuters) ? Two groups of buyout firms appear to be the top contenders to buy Intelsat in an auction that could value the No. 2 satellite operator at close to $5 billion, people close to the sale said on Wednesday.

Final bids for Bermuda-based Intelsat are due early next week in what is likely to be the latest in a series of asset transactions in a rapidly consolidating satellite industry, these people said.

So far, the main contenders appear to be a group composed of US-based Apollo Management and Madison Dearborn Partners and another that includes Apax Partners and Permira, both based in London, sources said.

But others buyout firms, including Thomas H. Lee Partners and Bain Capital, still have not ruled themselves out of the months-long auction, people briefed on the auction said. Two others. Kohlberg Kravis Roberts & Co. and Blackstone Group, are considered less likely bidders due to their recent purchases in the sector.

A sale of Intelsat, which operates 27 communications satellites covering a wide swath of the globe, will likely be the latest going-private transaction in the sector.

Earlier this year, KKR purchased DirecTV Group?s PanAmSat unit for $3.55 billion and then sold off 27 percent stakes each to Carlyle Group and Providence Equity Partners. And Blackstone Group in June agreed to buy Netherlands-based New Skies Satellites, a smaller operator, for $956 million.

Intelsat declined to comment on the auction process, as did representatives of all the potential buyers.

An Intelsat sale would come just months after the company, which maintains a US base in Washington, D.C., pulled a planned initial public offering. An agreed sale, which could be announced next week, is likely to value the firm at anywhere from $4.5 billion to $5 billion in a process that is managed by Morgan Stanley and Merrill Lynch.

Intelsat elected to pursue a sale to allow early investors, including 24-percent owner Lockheed Martin, to exit their investment after it cleared certain regulatory hurdles.

Although relatively slow growing, satellite companies like Intelsat are valued by private equity firms for their strong cash flow capacity that can be borrowed against to finance a purchase in a so-called leveraged buyout.

Buyout firms typically buy, build and sell companies in a three-to-seven year time frame, using a combination of cash and debt.

However, the Intelsat auction hasn?t attracted as many strong buyout candidates as PanAmSat?s, mainly because firms like Carlyle, Providence, Texas Pacific Group, Spectrum Equity Investors, KKR and Blackstone have already recently purchased such assets. Such firms typically don?t like to commit a large percentage of their funds to one asset class.

The two apparent lead contenders, however, aren?t fully invested in satellite assets, although Apax and Permira last year did purchase marine and aviation satellite operator Inmarsat for $1.5 billion.

The two groups won Inmarsat after a bid battle with Apollo and Soros Private Equity Partners, demonstrating those firms? interest in such assets, sources said.