Royal Philips Electronics NV approached Matsushita Electric Industrial Co and other buyout firms about selling its stake in LG.Philips LCD, according to a Merrill Lynch & Co internal note.
"We're hearing that Philips tapped all the various parties, not only industrial companies, but also financial companies like big private equity groups," Hong Kong-based Merrill analyst Daniel Kim, who covers flat-panel makers, wrote in the note written on Wednesday.
A sale to Matsushita would be "very positive" for LG.Philips because the transaction would ensure orders from the maker of Panasonic brand devices, Kim wrote in the note. Selling a 33 percent stake in LG.Philips, worth about US$5 billion, to Osaka-based Matsushita is one of many scenarios, Kim said in the note.
Philips chief executive officer Gerard Kleisterlee is seeking to focus on businesses that are less sensitive to economic swings than industries such as semiconductors and flat-screens. This month, Philips sold 80 percent of its chip subsidiary for US$4.4 billion and repeated its intention of selling its stakes in LG.Philips LCD and Taiwan Semiconductor Manufacturing Co (台積電).
Kim's note did not specify how he knew about the internal discussions.
Jayson Otke, a spokesman for Amsterdam-based Philips, declined to comment beyond repeating earlier comments the company plans to lower its stake in the liquid-crystal-display (LCD) venture in "a responsible manner." Akira Kadota, a Matsushita spokesman in Tokyo, also declined to comment.
Matsushita is the world's largest consumer-electronics maker.