Kao Corp., L'Oreal SA and Proctor & Gamble Co. are among firms expected to bid on struggling Kanebo Ltd. and Kanebo Cosmetics Inc. when the Industrial Revitalization Corp. of Japan issues requests for tenders, industry sources said Wednesday.

Any firm wishing to take part in the bidding must formally advise the state-backed revitalization agency by Thursday.

IRCJ plans to issue the first in a series of requests for tenders in September and the sponsor of the two firms will be chosen by the end of the year, they said.

The cost of the acquisition is expected to exceed 400 billion, yen according to the sources.

Kanebo Cosmetics was spun off from Kanebo in May last year as a more profitable segment in the Kanebo group. The two are undergoing rehabilitation with the help of IRCJ.

Firms interested in Kanebo include Japanese and foreign food companies, investment funds and pharmaceutical manufacturers, according to the sources.

Wacoal President Yoshikata Tsukamoto suggested Wednesday his company might make a bid on Kanebo in an alliance with other firms.

"While monitoring developments, our company will consider doing so if we can be of any help," Tsukamoto said.

The firms that have said informally they are interested in submitting bids might later strike alliances to share the costs of the acquisition, the sources said.

The sponsor will be chosen based on the size of the tender and whether the bidder is able to rehabilitate the Kanebo group, according to the sources.

IRCJ is presently Kanebo's largest shareholder, with more than half of the voting rights.

In June, the Tokyo Stock Exchange delisted Kanebo Ltd. after the firm acknowledged it falsified financial statements for five consecutive years through March 2004.