Landis+Gyr Said to Receive Takeover Bids From Toshiba, TPG

May 12, 2011, 12:29 AM EDT By Brett Foley and Jacqueline Simmons

(Adds analyst’s comment in fourth paragraph.)

May 12 (Bloomberg) -- Landis+Gyr AG, a Swiss electronic metering company, received bids from Japan’s Toshiba Corp. and two private equity firms in a sale that may fetch about $2 billion, according to two people with knowledge of the matter.

TPG Capital and EQT Partners AB submitted proposals by the May 9 deadline, and Landis+Gyr’s board had planned to discuss the matter at a meeting May 10, said the people, who declined to be identified because the details are private. Other companies including General Electric Co. and Bain Capital LLC dropped out of the process, said one of the people.

Founded in 1896, Landis+Gyr operates in 30 countries with about 5,000 employees offering meters for clients including E.ON AG, Centrica Plc’s British Gas unit and PG&E Corp. The company, controlled by Australian investment firm Bayard Capital, makes smart meters that allow utilities to check energy use remotely and can be connected to equipment that shows customers when rates are highest.

“The company’s client network is probably attracting bidders like Toshiba,” said Masahiko Ishino, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “For Japanese firms such as Toshiba, an acquisition is a quick way to expand in the smartgrid-related businesses after focusing mainly on information technology operations.”

Keisuke Ohmori, a Toshiba spokesman in Tokyo, declined to comment on any specific bid and said the company is working on the smartgrid business in a “variety of ways.” The Nikkei reported this week that Toshiba is bidding for Landis+Gyr.

Largest Smart Grid

“We do not comment on speculation,” Thomas Zehnder, a spokesman for Landis+Gyr, based in Zug, Switzerland, said by phone yesterday. Johan Hahnel, an EQT spokesman in Stockholm, and TPG’s Owen Blicksilver declined to comment.

In January, Landis+Gyr was chosen by State Grid Corp. of China to help build the world’s largest smart grid, agreeing to supply more than 10,000 commercial and industrial advanced electricity meters in six Chinese provinces.

Tokyo-based Toshiba, which lost a bid for Areva SA’s power- grid business in Dec. 2009, is seeking to expand its energy operations to transmission equipment countries such as the U.S. invest in upgrades of their electrical systems.

The maker of power-generating equipment including nuclear reactors is expecting sales of 700 billion yen ($8.6 billion) from “smart grid ” and “smart communications” businesses, the company said last year.

A smart-grid system more efficiently regulates use of energy from the main grid and independent sources with current that fluctuates like solar, wind and biogas and storage of the energy they produce. The network reduces reliance on a centralized energy source, better handling spikes in demand and reducing likelihoods of power disruptions.

Landis+Gyr is working with Credit Suisse Group AG and Lazard Ltd. to examine options, including a sale.

--With assistance from Randall Hackley and Giles Broom in Zurich, Jason Kelly in New York, Rachel Layne in Boston and Maki Shiraki and Mariko Yasu in Tokyo. Editors: Jennifer Sondag, Young-Sam Cho

To contact the reporters on this story: Brett Foley in London at bfoley8@bloomberg.net; Jacqueline Simmons in London at jackiem@bloomberg.net

To contact the editor responsible for this story: Jeffrey St.Onge at jstonge@bloomberg.net

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