Toyota Motor's portion will represent almost half of the roughly 10%, with the total sale seen at about 700 billion yen ($4.7 billion) at current market prices, the two sources said.
A Toyota spokesperson said it was not in a position to comment on Denso, adding the contents of the Reuters report of the share sale were not something it had announced itself.
Buyers of the shares are expected to largely be domestic investors, and the price has yet to be determined, the sources said.
Denso shares, which were down almost 4% before the news, extended losses after the Reuters report and fell as much as 6.8% on the day, closing 4.9% lower.
Toyota shares finished little changed, as did the benchmark Nikkei 225 (.N225).
Persons:
Miho Uranaka, Daniel Leussink, Maki Shiraki, Nobuhiro Kubo, David Dolan, Jamie Freed
Organizations:
Companies, Toyota, KDDI Corp, Tokyo Stock Exchange, Reuters, Nikkei, Thomson
Locations:
TOKYO, Denso