Private equity bidding for Livedoor's Yayoi-sources

TOKYO, July 4 (Reuters) - Private equity firms are lining up to buy Japanese accounting software firm Yayoi Co. from Livedoor Co. for between 62 billion yen and 70 billion yen ($507-572 million), sources familiar with the situation said on Wednesday.

Private equity firms Advantage Partners, South Korea's MBK, a consortium of MKS and Tokio Marine Capital, and the principal investment arm of Goldman Sachs Japan (GS.N) are bidding for the firm which develops and sells accounting software.

Japanese Internet firm Livedoor bought Yayoi in November 2004 from Japanese private equity firm Advantage Partners for about 20 billion yen ($167 million), sources have said.

Since then Livedoor has suffered a series of setbacks. Its shares were delisted last year after its founder Takafumi Horie was imprisoned for securities fraud.

In April, Livedoor said it planned to revive its earnings by focusing on developing new Web technology such as blogs.

Private equity firms, armed with record amounts of capital from investors, are keen to put their money to work in Japan but a lack of targets has meant price tags have been climbing.

Yayoi is an attractive target for the funds because of its stable cash flows.

UBS (UBSN.VX) is acting as the adviser to Livedoor on the sale.

The private equity firms either declined to comment or were not immediately available.

((Reporting by Alison Tudor, editing by Malcolm Whittaker; Reuters messaging: alison.tudor.reuters.com@reuters.net; +81-3-3432-9998, alison.tudor@reuters.com))

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