Royal Philips NV has shortlisted a clutch of Asian suitors in the bidding for its home appliance unit, which could fetch at least 3 billion euros (US$3.7 billion), people with knowledge of the matter said.
Philips invited Chinese buyout firm CDH Investments (鼎暉投資) and domestic appliance maker TCL Technology Group Corp TCL (科技) to lodge second-round offers, the people said on Tuesday.
Asian investment firm Hillhouse Capital Group (高瓴資本集團) has also progressed, as well as at least one other party, the people said, asking not to be identified.
The business had initially attracted interest from several large US and European private equity firms, including PAI Partners, Apollo Global Management Inc, Advent International and CVC Capital Partners, but several of the funds balked at the asking price of at least 3 billion euros, the people said.
TCL Technology has teamed up with China’s Citic Capital Holdings Ltd (中信資本), the people said.
Philips has separately been considering an initial public offering of the business, the people said.
Hillhouse, started by Yale University endowment alumnus Zhang Lei (張磊), is an investor in Chinese air conditioner maker Gree Electric Appliances Inc (格力電器).
Deliberations are ongoing and the suitors could decide against binding offers, the people said.
Representatives for CDH Investments, Citic Capital, Hillhouse and Philips declined to comment, while a spokesperson for TCL Technology did not immediately respond to requests for comment.
Philips last year said that it plans to sell the home appliance unit, which produces everything from coffee makers to air purifiers.
The potential disposal is part of chief executive officer Frans van Houten’s efforts to revamp Philips into a focused manufacturer of healthcare equipment.
Van Houten in October last year said that the process of separating the business is “on track” and expected to be completed in the third quarter of this year.
Shares in TCL Technology yesterday fell as much as 1.9 percent in Shenzhen trading, while Philips on Tuesday dropped 2 percent in Amsterdam trading.
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