Bidders for Sanyo chip unit cut to about 5: Source

Tokyo, May 16: Japan's Sanyo Electric Co. Ltd. has narrowed the number of bidders for its microchip operations to around five firms, according to a source familiar with the situation.

Among the private equity firms interested in acquiring the chip business were a consortium including Japan's MKS and separately Cerberus Capital Management LP, sources have said.

Japanese media reports named chip maker Rohm Co. Ltd. as another likely contender.

Goldman Sachs and Daiwa Securities SMBC, who are working as advisers for the loss-making consumer electronics maker, are in the process of whittling down the some 20 firms who had expressed an interest in the unit.

They are basing their choice on several criteria, the most important of which is price. Other factors include their proposed business plans and strategic fit with the company's operations.

The Osaka-based company spun off the chipmaking business last year in a move widely seen as a prelude to a sale or public share listing.

The business, now a wholly owned Sanyo subsidiary, suffered when an earthquake damaged a major factory in 2004. Sanyo issued 300 billion yen (Tokyo, May 16: Japan's Sanyo Electric Co. Ltd. has narrowed the number of bidders for its microchip operations to around five firms, according to a source familiar with the situation.

Among the private equity firms interested in acquiring the chip business were a consortium including Japan's MKS and separately Cerberus Capital Management LP, sources have said.

Japanese media reports named chip maker Rohm Co. Ltd. as another likely contender.

Goldman Sachs and Daiwa Securities SMBC, who are working as advisers for the loss-making consumer electronics maker, are in the process of whittling down the some 20 firms who had expressed an interest in the unit.

They are basing their choice on several criteria, the most important of which is price. Other factors include their proposed business plans and strategic fit with the company's operations.

The Osaka-based company spun off the chipmaking business last year in a move widely seen as a prelude to a sale or public share listing.

The business, now a wholly owned Sanyo subsidiary, suffered when an earthquake damaged a major factory in 2004. Sanyo issued 300 billion yen ($2.50 billion) in preferred shares last year, giving Goldman and Daiwa Securities SMBC a 24.5 percent stake each in terms of voting rights.

Daiwa Securities SMBC is a venture between Daiwa Securities Group and Sumitomo Mitsui Financial Group By late afternoon, shares in Sanyo were 2.1 percent lower at 185 yen, underperforming the Tokyo stock market's electrical machinery index IELEC, which fell 0.13 percent.

Reuters.50 billion) in preferred shares last year, giving Goldman and Daiwa Securities SMBC a 24.5 percent stake each in terms of voting rights.

Daiwa Securities SMBC is a venture between Daiwa Securities Group and Sumitomo Mitsui Financial Group By late afternoon, shares in Sanyo were 2.1 percent lower at 185 yen, underperforming the Tokyo stock market's electrical machinery index IELEC, which fell 0.13 percent.

Reuters>