OSAKA, Feb 21 (Reuters) - The governor of Osaka said on Friday the prefecture would sell a local train and warehouse operator to Nankai Electric Railway Co 9044.T for 75 billion yen ($733 million) after U.S. investment fund Lone Star Fund's bid was blocked in December.

Lone Star, a distressed-asset investment fund, had won the right in November to buy the Osaka Prefectural Urban Development Co for 78 billion yen, but that bid was blocked by the Osaka municipal government.

Osaka prefecture owns 49 percent the company while Osaka Gas Co 9532.T , Kansai Electric Power Co 9503.T and Japanese banks including Resona Holdings Inc 8308.T own the rest.

($1 = 102.3150 Japanese yen)

(Reporting by Yoshiyuki Osada in OSAKA and Junko Fujita in TOKYO; Editing by Chang-Ran Kim)

((813-6441-1840, junko.fujita@thomsonreuters.com, Reuters Messaging:junko.fujita.reuters.com@reuters.net))

Keywords: NANKAIELECTRIC OSAKA/SALE