Matsushita, which has been looking for a buyer for its struggling JVC, in which it has a 52.4 per cent stake, has been unable to close a deal for want of suitable buyer.

Matsushita, maker of the Panasonic brand, ended JVC stake sale talks with US equity fund TPG Inc and turned back to Kenwood, with which it had held talks late last year, reports in the Nikkei said.

A deal would involve dilution of JVC shares whereby JVC would issue Y20 billion in new shares to Kenwood, the report said.

"We are considering various options in regard to our stake in JVC," but nothing has been decided, a Matsushita spokesman said. Kenwood said it hasn''t made any decision on matters related to a JVC sale.

If the negotiations lead to a deal, Kenwood would get access to the well-known JVC brand, and the two companies could cooperate in car electronics and home stereos.

JVC''s mainline products like flat-screen TVs and video cameras are, however, outside of Kenwood''s main business.

JVC has a Y10 billion debt repayment due at end-July, and is implementing reforms, including job cuts as it expects a Y10.5 billion group net loss for this fiscal year ending March 2008.

Victor gave the world the first VHS video recorder, but it has had few hits of late, and is headed for its fourth straight year of losses.

Matsushita, best known overseas for its Panasonic brand, has seen little success in its efforts to restructure the company. It sent in its own man, Masahiko Terada, in 2001 only to see him resign at the end of May amid a round of 1,800 job cuts.