DFS, the sofa retailer, is poised to be sold for more than £500m before the end of next week.
The private equity firms Cinven, Permira and Advent International are gunning to acquire the group, which is owned by its founder Lord Kirkham. Final bids for the 78-store chain are due as early as 17 March.
The sustained interest of the three buy-out firms throughout the sale process suggests that Lord Kirkham could be set for another bumper pay day at the top end of his expectations.
A major donor to the Conservative Party and one of South Yorkshire's richest men, he took DFS private for £507m in 2004 after a battle with shareholders who claimed he bought it back at a cheap price.
A source said that DFS has a "formula that has stood the test of time and has a proven track record of delivering profitability".
DFS has benefited from the demise of a string of rivals during the recession. MFI, Ilva, The Pier and Land of Leather have all been consigned to retail history, while others, including ScS and Lombok, have emerged from the other side of pre-pack administrations.
For the year to July, DFS grew its earnings before interest, tax, depreciation and amortisation by 42.1 per cent to £86.7m. But the company is believed to have debts of about £330m and there is no guarantee that a deal will go through. There is also no obvious successor to 65-year-old Lord Kirkham at DFS.
John Lovering, the outgoing chairman of Debenhams, is understood to be advising Permira on its bid for DFS. The department store's current chief executive, Rob Templeman, has also been linked to the competing Cinven bid for the sofa specialist. DFS, Debenhams, Cinven, Permira and Advent declined to comment yesterday.
Mr Lovering, who became the chairman of the pub group Mitchells & Butlers in January, will step down from Debenhams at the end of this month.
Despite tough trading in the sector, private equity firms are still keen to acquire retailers that have shown strong growth potential. In January, KKR paid £955m for Pets at Home, the retailer of pet supplies and accessories.