A strong contender looks to be French cosmetics giant L'Oreal, which is reported to have entered the bidding with US investment bank Morgan Stanley.
Other contenders include Japanese rival Kao, which last year put up a serious offer for Kanebo's cosmetics division.
However, the bid was scuppered at the last minute, after spiraling debt meant the intervention of the IRC (Industrial Revitalisation Corp Japan) - a state-backed body that helps companies in financial difficulty to get back on their feet.
But if it is to receive sufficient funding from its new owners, Kanebo could well become a serious threat to cosmetics manufacturers, industry analysts say.
The winning bidder will gain control of both the household and cosmetics divisions of Kanebo.
However, as the number of major cosmetics companies involved in the process would indicate, the primary interest revolves around the company's more profitable cosmetics operations.
This gives analysts reason to believe that there is a strong possibility the household business operations will then be sold after the company is bought up.
The IRC, which is overseeing the bidding, has said that it will not give out any information about the bidding process until the process is finalised at the end of the year.
Kanebo admitted to inflating its profits to the tune of €2 billion over a five year period that ended in March 2003.
The revelation came amidst a number of blue chip Japanese companies that admitted to similar accounting inaccuracies around the same time.
Currently the IRC owns a 51 per cent controlling stake in Kanebo and an 86 per cent stake in its cosmetics division.
The body has invested significant sums in Kanebo, but as the company starts to regain some of its financial stability the bidding process is ready to be undertaken.
Meanwhile Kanebo is operating a 'business as normal' approach to its operations.
Indeed the cosmetics division has just launched one of the most expensive skin creams in the world.
Twany Century Cell Rhythm SP is, according to press reports, the company's most expensive skin cream to date.
Priced at JPY 126,000 (€926) for a 40 gramme pot, it is an anti-ageing treatment designed for middle-aged and older women.
External links to companies or organisations mentioned in thisstory: Kanebo L'Oreal Kao