UPDATE 1-Siemens board examines notices of interest in VDO

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Mon Apr 16, 2007 6:06am EDT

(Adds details, background, shares)

FRANKFURT, April 16 (Reuters) - Siemens' (SIEGn.DE) board of management is examining letters of intent from parties interested in buying the German conglomerate's automotive engineering unit, valued at up to 9 billion euros ($12 billion).

"Since we announced our decision to float VDO, we had notice of interest from several strategic and financial investors for a cooperation," a Siemens spokesman said on Monday.

"Due to its duty of care, the management is examining all notices of interest that have been received. Beyond that, we cannot and will not comment on any rumours or speculations in the market," he added.

Siemens shares traded up 2.1 percent at 87.44 euros by 0951 GMT, one of the top gainers in a 0.7 percent-firmer DAX .GDAXI, after the Financial Times Deutschland earlier reported Siemens could get a price of more than 10 billion euros.

The newspaper named financial investors Kohlberg Kravis Roberts, Permira and Bain Capital as potential bidders, along with U.S. car safety company TRW (TRW.N) and its majority owner, the Blackstone Group.

VDO, which makes car electronics and sensors including safety and entertainment equipment, had sales of 10 billion euros last year, about 11 percent of Siemens' total revenues.

The business has few synergies with Siemens' other units, which make products ranging from factory-automation gear to power turbines to healthcare equipment.

German tyre and car parts maker Continental (CONG.DE), which publicly announced its interest in buying VDO as soon as Siemens said in January it wanted to float up to half the unit, said on Monday it was still interested.

"We have stated our interest in the past. Nothing has changed. We won't comment on the current speculation," a Continental spokesman said.

Continental shares rose 1.6 percent to 102.52 euros, while its five-year credit default swaps fell 7 basis points to 55 basis points, a dealer in London said.

The Siemens spokesman added that the company was still working very hard on preparations for an initial public offering for VDO.

((Reporting by Georgina Prodhan, Jens Hack and Michael Shields; Editing by David Cowell; Frankfurt newsroom +4969 7565 1265; georgina.prodhan@reuters.com; Reuters Messaging: georgina.prodhan.reuters.com@reuters.net)) - ($1=.7381 Euro) Keywords: SIEMENS VDO/OFFERS

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