By Miho Uranaka, Makiko Yamazaki and Ritsuko Shimizu

TOKYO (Reuters) – Private equity firms KKR and Bain Capital each offered more than $5 billion in first-round bids for the non-core assets of Japan’s Seven & i Holdings, according to people familiar with the matter.

KKR is offering about 800 billion yen ($5.1 billion) for York Holdings, an entity due to be spun off from the Japanese retailer, two of the people said. Rival US firm Bain offered about 1.2 trillion yen, one of the people said. Local buyout firm Japan Industrial Partners offered nearly 750 billion yen, one said.

All three companies were successful in the first round of bids for the assets, according to two of the people. Reuters spoke to three people about the first-round bids, all of whom declined to be identified because the information is not made public. The size of the bids has not been previously reported.

The bids exceeded the 500 billion yen enterprise value — a measure that includes debt — expected by 7-Eleven’s owner, according to one of the people.

A spokeswoman for Seven & i declined to comment, saying the bidding process was not public. KKR, Bain and Japan Industrial Partners also declined to comment.

Seven & i is looking to hive off non-core businesses, including its expanding supermarket operations, into the York Holdings unit, which is home to 31 subsidiaries including the superstores business. of the group, baby goods store Akachan Honpo and the company that operates Denny’s (NASDAQ: ) restaurants in Japan.

Separately, the retailer’s founding family is in talks to take Seven & i private. That deal, a management buyout, was designed to fend off a $47 billion takeover offer from Canada’s Alimentation Couche-Tard.

The three private equity firms will now submit legally binding proposals but may change their offers after due diligence, two of the people said. Unsuccessful bidders from the first round could still enter negotiations if the three fail to reach an agreement with Seven & i, two of the people said.

Seven & i aims to choose the winning bid as early as February, one of the people said. The decision will be made in the spring, the other person said.

The founding family has also approached Bain and KKR about mezzanine funding for a management buyout, two of the people said.

The market capitalization of Seven & i stood at 6.2 trillion yen on December 24. The privatization, if realized, would be the largest company in Japan.

($1 = 157.0300 yen)