Private-equity owned Nycomed and a Japanese drugs company are in the early second round of an auction for all of Solvay's pharmaceuticals business, a person familiar with the matter said on Wednesday.

Analysts reckon the Belgian chemicals and drug maker's Solvay Pharmaceuticals unit could fetch 5 billion euros ($7 billion) or more, although Solvay has said it is open to other options such as a partnership or flotation. Abbott Laboratories, Solvay's partner for its cholesterol-fighting blockbuster TriCor, is not seeking to buy the whole unit, but the U.S. drugmaker is interested in acquiring TriCor and possibly other parts of Solvay's drugs business, the person added. However, an Abbott spokesman said the company was already strong enough in the class of drugs that includes TriCor. We have no interest in expanding our participation in the fenofibrate market, where we already have a very strong presence, he said.

Solvay hopes to conclude a deal by the end of the European summer, the person said, but has yet to set a deadline for binding, second-round bids. The person declined to identify the Japanese suitor.

Shares in Solvay rose 6 percent by 1107 GMT to 61.92 euros a share.

The Financial Times earlier reported Solvay had whittled down its list of bidders to two -- Nycomed, and Abbott, which was bidding only for TriCor.

Bidders have begun due diligence and have held initial meetings with management, and will continue to investigate the business, including making site visits, the first source and a second person, also familiar with the matter, said.

For Nycomed, whose biggest owner is Nordic Capital, Solvay could offer big possible cost savings through European synergies. A Japanese bidder would gain a European platform.

Nycomed declined to comment. Solvay reiterated it was conducting a strategic review of the business but declined to comment further.

In Japan, spokesmen for Astellas Pharma Inc and Eisai Co Ltd declined to comment. A Takeda Pharmaceutical Co Ltd spokesman referred to a May 29 statement that the company would not bid for the Solvay unit.

(Additional reporting by Philip Blenkinsop in Brussels, Sam Cage in Zurich, Lewis Krauskopf in New York and Ritsuko Shimizu in Tokyo; Editing by Erica Billingham and David Holmes)

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