The deal saw 21 million shares placed with institutions and other investors at 533p each. The two children now hold a 2 per cent stake in the company. Sir Graham holds 8 per cent and says he has no plans to sell his holding.
The sale removed an element of uncertainty over the shares, which rose 16.5p to 544p.
The shares were sold by Michael Kirkham, a 29-year-old charity worker, and his sister Julie, a 30-year-old former Yorkshire television employee who has recently given birth to her second baby. They sold the shares because they wanted to develop a wider portfolio of investment interests.
Sir Graham said he was not disappointed with the decision. The share sale is the latest in a string of disposals by the family founded by Sir Graham 26 years ago.
The family sold 48 per cent of the business for pounds 125m when DFS was floated on the stock market in 1993. A year ago, Sir Graham sold another batch of shares worth pounds 74m.
Sir Graham hinted that some of the money raised by his children's sale might be invested in property or art. He said the family had no significant property interests "which might be seen as a gap". Sir Graham's children share his interests in art, though their tastes differ. While Sir Graham prefers traditional artists such as Gainsborough, his son prefers modern German paintings.
Last month DFS unveiled a 18 per cent surge in profits to pounds 31m. This was accompanied by a 20 per cent increase in the dividend and a special dividend of 10p per share for the second year running.
There are 38 branches of DFS, which specialises in selling upholstered furniture at competitive prices. The company has recently moved into the highly competitive London market with its first stores within the M25.
Heavy advertising and training costs have dented margins but the plan is to build a national network of 100 stores. This would give DFS a 25 per cent share of the UK upholstered furniture market.