UPDATE 3-Bain, KKR bidding for Singapore's Unisteel-sources

(Adds statement from Unisteel, updates share prices)

By Michael Flaherty and Alison Tudor

HONG KONG/TOKYO, May 2 (Reuters) - Bain Capital and Kohlberg Kravis Roberts & Co [KKR.UL] are among the private equity firms bidding on Singapore-based disk drive component maker Unisteel Technology UNST.SI, sources close to the matter said on Friday.

Macquarie's (MQG.AX) investment banking group is running the auction and a first round of bids has already been received, the sources said.

Analysts have said the company could be worth around S$800 million ($588 million).

Unisteel issued a statement late on Friday confirming that it had appointed Macquarie to help it evaluate "preliminary approaches from certain parties in relation to a proposed transaction".

It said it was not certain that a deal would take place.

Shares of Unisteel rose more than 11 percent to close at S$1.79 giving it a market value of about $530 million after Reuters reported on the potential deal.

Unisteel's auction represents another acquisition opportunity in the hard disc drive sector, which has seen a wave of consolidation amid stiff competition and falling prices.

Carlyle Group [CYL.UL] and TPG Capital [TPG.UL] are also pursuing Unisteel but Bain and KKR are seen as having the strongest interest in Unisteel, said the sources, who were not authorised to speak to the media about the deal.

"Unisteel is a stable business with good cash flow that would make it relatively easy to finance," said one of the sources, who did not want to be identified. "That is why it's attractive to these funds."

Unisteel said on April 15 that the ownership of the company was under review, but added that discussions with potential buyers were at preliminary stages and might not progress.

Macquarie, and all four private equity firms, declined to comment.

HOT PURSUIT

The hard disk drive industry has been in upheaval in recent years as leading players Seagate Technology STX.N and Western Digital (WDC.N) scooped up suppliers.