Japan’s Hisamitsu Pharmaceutical has bid along with Blackstone, which is looking to combine LTS with its drug contract manufacturing subsidiary Catalent, and KKR, which is seeking to complement its hard capsules maker Capsugel.
Separately, private equity groups EQT, CVC, Nordic Capital, Carlyle and Wendel have placed offers.
German specialty chemicals maker Evonik and Nivea skin cream maker Beiersdorf showed initial interest but did not take part in the auction, the sources said.
The bids value the group at about 12 times EBITDA of about 95 million euros. Listed healthcare companies in Europe trade at a multiple of about 10, StarMine data shows.
LTS Lohmann’s owners, which include Novartis with a 43 percent stake, met on Oct 11 to discuss the offers, one of the sources said.
German billionaire Dietmar Hopp, who co-founded software giant SAP, holds about 30 percent while German investment company BWK owns a 24 percent stake.
Sources told Reuters in July that Morgan Stanley had been hired to find a buyer for LTS Lohmann.
Bankers were putting together about 700 million euros of debt financing to back the sale of the medical patch maker, banking sources said.
LTS Lohmann makes 286 million euros in annual sales from nicotine and other medical patches to treat conditions including Parkinson’s and Restless Legs Syndrome.
A likely sticking point in negotiations will be whether LTS Lohmann can succeed in preventing generic drugmakers from launching cheap copies of its Exelon patch for mild to moderate dementia. Novartis has sued Actavis for trying to bring its version to market.
Transdermal patches of the type made by LTS have become increasingly important in the drugs industry since they offer a convenient and reliable way of delivering a variety of medicines.
A spokesman for Dietmar Hopp’s investment vehicle and the private equity groups declined to comment.
Hisamitsu, Novartis and BWK were not immediately available for comment.
Arno Schuetze is a reporter for Reuters News in Frankfurt