Usen has started negotiations to sell distribution subsid Gaga Communications in a management buyout led by Gaga topper Tom Yoda.

Usen, which holds 58.3% of Gaga’s shares, and its subsid Almex, which owns the rest, will sell all their shares with first dibs going to T.Y., Yoda’s wholly owned company, and the Kinoshita Group, a home builder headed by Naoya Kinoshita.

The pair have the right of first negotiation from May 12 to June 23, Usen announced on Tuesday.

Usen has already hived off money-losing video portal Gyao and content provider Showtime to improve its sagging balance sheet. The company recorded a 50% drop in operating profit in the first quarter (September-November 2008) of the current fiscal year vs. the same period the previous year.

Meanwhile, Gaga, once an aggressive buyer of Hollywood product, has gone on the acquisitions wagon while focusing on distribution in partnership with other companies.

This policy has turned it back toward the black, but Usen, citing a “turbulent environment for the film market,” believes that selling Gaga and reconfiguring it as a fast-on-its-feet, stand-alone company will be better for both parties.

Gaga is capitalized at $36.5 million.