By Pamela Barbaglia and Dasha Afanasieva

LONDON, July 18 (Reuters) - Three buyout funds are preparing binding offers for British online retailer Shop Direct, a business valued at up to 3 billion pounds ($3.90 billion) by its billionaire owners, twin brothers David and Frederick Barclay, sources familiar with the situation told Reuters.

Hellman & Friedman, BC Partners and Apax have made it to the final stages of an auction process which was launched earlier this year by Swiss investment bank UBS, they said.

The three private equity investors are putting the finishing touches to their rival offers ahead of a July 19 deadline, the sources said, cautioning that price expectations might be hard to match.

The company's 3 billion pound price tag and its exposure to the consumer credit market, which is facing tighter regulation and a possible spending slowdown after Britain leaves the European Union, have raised concern among prospective bidders that final offers may fall short of expectations, the sources said.

Shop Direct, Hellman & Friedman, BC Partners and Apax declined to comment.

The Barclay brothers have backed the British retailer for almost 15 years. They first acquired Littlewoods, one of the company's main brands, in 2002 from the Moores family and went on merging it with home shopping firm, ARG Equation - part of former retail group GUS - to create what now ranks as one of the largest online retailers in Britain.

Based in Speke, near Liverpool in north west England, Shop Direct has a number of brands which include shopping sites Very.co.uk, VeryExclusive.co.uk and Littlewoods.com and generates overall annual sales of about 1.9 billion pounds.

Last year, the business increased its earnings before interest, tax, depreciation and amortisation (EBITDA) by 18 percent to 230.5 million pounds and its owners are aiming for a valuation that represents at least 13 times its EBITDA, the sources said.

The sales process initially drew interest from a large number of private equity investors who later walked away amid pricing challenges and growing concern over the future of Shop Direct's large stream of consumer credit revenues, the sources said.

The Barclay brothers have diversified their investment portfolio to include substantial interests in media and property beside retail. The identical twins control The Telegraph Media Group and the Ritz Hotel in London.

($1 = 0.7688 pounds) (Reporting By Pamela Barbaglia. Editing by Jane Merriman)