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Danone's medical nutrition unit on board agenda Thursday - source

Yoghurt called Danio produced by French Dairy Group Danone are seen on display on shelves during the company's 2013 annual results presentation in Paris February 20, 2014. REUTERS/Benoit Tessier

PARIS (Reuters) - French food group Danone will hold a board meeting on Thursday to discuss whether to keep or sell its medical nutrition business, a person familiar with the matter said. Bloomberg earlier on Wednesday said that Danone's board would consider whether to sell the business to a group led by Germany's Fresnius or to Hospira for more than 3 billion euros ($3.73 billion). "At tomorrow's meeting, the board could decide to sell or keep the business," said the person. While the Fresenius group is perceived to be the front runner to enter exclusive talks, Danone is expected to push for a higher offer, Bloomberg said, citing people familiar with the matter. Danone could not be immediately reached for comment while Fresenius declined to comment. Reuters reported in February that Danone was looking to sell its medical nutrition business, worth an estimated 4 to 5 billion euros. But Fresenius was said last month to be considering pulling out of the bidding because of frustration with the slow progress of the process. A sale of its medical nutrition business would help Danone, the world's leading yoghurt firm, focus on its main businesses of baby food, dairy and bottled water. Danone could also use the proceeds from a sale to help fund a takeover of U.S. infant formula maker Mead Johnson Nutrition Group , a potential deal which sources familiar with the matter have said it wants to pursue. Danone's shares closed unchanged at 55.84 euros on Wednesday, giving it a market capitalisation of almost 36 billion euros ($44.77 billion). ($1 = 0.8036 euros) (Reporting by Dominique Vidalon and Noelle Mennella in Paris and Ludwig Burger in Frankfurt; Editing by Leila Abboud and Greg Mahlich)