UPDATE 1-Japan's Lawson, Isetan bid for high-end supermarket chain -sources
* Marunouchi Capital seeking $490 mln including debt -sources
* IPO an option if seller dissatisfied with bids -source (Recasts and adds details on bidders, industry)
By Ritsuko Shimizu and Emi Emoto
TOKYO, April 18 (Reuters) - Japanese retailers Lawson Inc and Isetan Mitsukoshi Holdings Ltd are among first-round bidders for Seijo Ishii Co, an operator of high-end supermarkets, in a deal that could be worth up to $490 million, sources familiar with the matter said.
Smaller-scale specialty stores like Seijo Ishii that fall somewhere between convenience stores and full-sized supermarkets have become a popular format in Japan as the number of elderly and single-person households increases.
But while the owner, Japanese investment fund Marunouchi Capital, was looking to sell Seijo Ishii for about 50 billion yen ($490 million) including debt, sources on the bidding side said the asking price tag looked too steep.
A source at a domestic retailer said the company had decided not to bid as it had considered the price excessive.
Three to four domestic retailers have submitted offers, the sources said, declining to be identified as the bidding process is confidential. The names of the other bidders could not be immediately confirmed.
Representatives for Lawson, Japan's No.2 convenience store operator, and Isetan Mitsukoshi, the nation's biggest department store chain, declined to comment. Marunouchi Capital also declined to comment.
Marunouchi Capital, owned by Mitsubishi Corp and Mitsubishi UFJ Securities, bought Seijo Ishii, which specialises in imported and upmarket goods, from restaurant franchiser Rex Holdings in May 2011 for about 42 billion yen, sources have said.
A final decision on a buyer could come as early as autumn, a source said but added that an initial public offering remains a possibility if Marunouchi Capital is not satisfied with the bids.
Seijo Ishii had 110 stores at the end of December and is accelerating shop openings mainly at subway stations and shopping malls.
Lawson in February opened the first of its Lawson Mart stores, which are aimed at marrying the convenience of 24-hour operations with value-added goods such as fresh produce and ready-made foods. The company is targeting 700-800 Lawson Mart stores in Japan over the next three years.
Isetan Mitsukoshi, for its part, has been expanding its Queen's Isetan chain of high-end food supermarkets. ($1 = 102.2650 Japanese Yen) (Additional reporting by Junko Fujita in Tokyo; Writing by Chang-Ran Kim; Editing by Edwina Gibbs)