The Wall Street Journal (WSJ) reported yesterday that German healthcare company, Fresenius, and Permira have made a joint offer to acquire the division, which manufactures products for those weakened by illness or chronic conditions.
Citing sources close to the matter, WSJ reported that the unspecified bid was tabled by the duo earlier this week.
Danone's medical nutrition division boasts a portfolio that includes liquid food for hospital patients unable to eat solids, food supplements for elderly people with failing appetites, and products for those that suffer from allergies.
It is believed the business could fetch between €3bn (US$3.8bn) and €4.5bn (US$5.6bn).
Approached, Fresenius declined to comment on reports it and Permira have joined forces.
"We cannot comment on this," Matthias Link, vice president of corporate communication, Fresenius, told DairyReporter.com.
Calls made to London-based Permira were not returned.
Paris-based Danone declined to comment on the reports.
With €1.3bn (US$1.6bn) in sales in 2013, medical nutrition is the smallest of Danone's four business units.
It has been widely reported in the last year that Danone is trying to sell the division.
Despite months of rumored talks with the likes of Nestlé, Abbott Laboratories, and Hospira, the joint bid reportedly produced by Fresenius and Permira is the only one currently on the table, the WSJ sources claim.
Danone has set a deadline of early next week for interested parties to produce an offer, the sources added.
Earlier this week, Danone declined to comment on reports it is considering an initial public offering (IPO) of shares in its medical nutrition business.
Bloomberg, citing sources, reported that Danone was considering listing the business, after efforts to sell it outright failed.