KKR, Carlyle Are Shortlisted for Hitachi Metals Bids

(Bloomberg) -- Three U.S. investment funds have been shortlisted in the next round of bidding for Hitachi Metals Ltd. as industrial conglomerate Hitachi Ltd. proceeds with its sale of the unit, according to people familiar with the matter.

Bain Capital, Carlyle Group Inc. and KKR & Co. are poised to make separate offers, while the deadline for the second round of bids has been set for the middle of February, the people said, asking not to be identified because the talks are confidential. Public-private fund Japan Investment Corp. and Japan Industrial Partners Inc. are exploring teaming up with any of the funds, the people said.

Hitachi has been acquiring and disposing of assets over the past few years as part of consolidation efforts. It exited a $26 billion U.K. nuclear power project in September, and previously bought out its high-tech unit, while selling its diagnostic-imaging business. The company had a 52.8% stake in Hitachi Metals as of March 31, representing, according to data compiled by Bloomberg.

Shares of Hitachi Metals reversed losses to reach an intraday high a few minutes before the market close in Tokyo, rising as much as 1.5%. The company, which has a market value of 683 billion yen ($6.6 billion), makes products including specialty steel, rare earth magnets and electric wires.

While Hitachi is considering various options to improve its corporate value, nothing has been decided and the company refrains commenting on individual deals, said spokesman Yuichi Izumisawa. Spokespeople for KKR, Bain, Carlyle and JIC declined to comment, while representatives for JIP weren’t immediately reachable.

(Updates with share move in the fourth paragraph)