Toshiba, KKR to bid for Panasonic healthcare unit-sources

TOKYO Fri May 24, 2013 2:22am EDT

TOKYO May 24 (Reuters) - Toshiba Corp and U.S. private equity firm Kohlberg Kravis Roberts & Co (KKR) are among those expected to bid for Panasonic Corp's healthcare business, financial sources with knowledge of the matter said.

Panasonic is looking to raise as much as $1 billion by selling shares in the healthcare unit, whose products include blood sugar monitoring equipment, hearing aids and electronic medical record-keeping systems.

The company, which is being advised by Bank of America Merrill Lynch on the sale, has set a deadline of Monday for first-round bids, according to the sources who spoke on condition of anonymity because the bidding is not public.

Panasonic declined to comment on the sale process.

About 10 investment funds, including KKR, Bain Capital, Carlyle Group, TPG Capital Management, CVC Capital Partners and Unison Capital are expected to enter bids, the sources said.

Japanese electronics conglomerate Toshiba and a handful of manufacturers are also planning to bid, they said.

Representatives of Toshiba and KKR declined to comment.

Panasonic President Kazuhiro Tsuga said in March that he would seek a partner "with medical knowledge and skills and capital for future growth" to invest in the healthcare unit as part of a wider company revamp to bolster profitability.

Tsuga did not say how much of the unit he planned to sell. The business generated a profit of 8.7 billion yen ($85.77 million) on 134.3 billion yen in sales in the previous business year ended in March.

Investment funds are eyeing the growth potential of its blood sugar monitoring devices in markets such as China and India, while Toshiba sees the deal as a way to bolster its medical equipment operations, the sources said.

The company is aiming to narrow the field to two or three bidders in June, conduct a second round of bidding in July and enter exclusive talks with one firm around August.