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Bidders for Toshiba's Landis+Gyr narrows to two - sources

Published 2017-06-26, 12:07 p/m
© Reuters.  Bidders for Toshiba's Landis+Gyr narrows to two - sources
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By Clara Denina , Claire Ruckin and Arno Schuetze

LONDON/FRANKFURT, June 26 (Reuters) - The field of prospective bidders for Japanese conglomerate Toshiba Corp.'s 6502.T Swiss-based smart meter group Landis+Gyr has narrowed to two, three banking sources said on Monday.

The two - Goldman Sachs Group Inc (NYSE:GS).'s GS.N private equity arm and Canada's Onex Corp ONEX.TO - are undertaking due diligence checks, the sources said.

A consortium of buyout firm CVC Capital Partners and Japanese conglomerate Hitachi Ltd 6501.T had withdrawn its offer, as had Honeywell International Inc (NYSE:HON) HON.N , the sources said. first round of bids for Landis+Gyr, for which bankers are preparing debt packages of around $1 billion or 5-6 times its $200 million EBITDA (earnings before interest, tax, depreciation and amortization), closed in May and binding offers are expected in July.

Goldman Sachs and Landis+Gyr declined to comment. CVC declined to comment, while Hitachi and Onex were not immediately available for comment.

Toshiba is also preparing for an initial public offering (IPO) of Landis if final bids fall short of its expectations, as the Japanese company scrambles to raise funds to cover massive losses at U.S. nuclear unit Westinghouse. hired UBS this year for the deal and later added Morgan Stanley (NYSE:MS), Credit Suisse (SIX:CSGN) and JP Morgan to help with the potential IPO.

CVC and Hitachi, whose initial preemptive offer of almost $2 billion to buy Landis+Gyr was declined, as well as Honeywell decided not to pursue deals due to the likely valuation and the prospects of a listing, the sources said.

One of the sources said the company was aiming for offers 12 times EBITDA, which deterred many bidders.

There has been a wave of M&A activity in the metering industry. CVC is selling German metering and energy management group Ista, which could be worth up to 4.5 billion euros, while German metering group Techem could be put up for sale this year. bought Landis+Gyr in 2011 for $2.3 billion jointly with state-backed Innovation Network Corporation of Japan, which holds the remaining 40 percent in the company.

Landis+Gyr, in which Toshiba has a 60 percent stake, employs more than 5,700 staff and is active in over 30 countries.

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