Whitbread, the owner of Costa Coffee, has confirmed it is in talks to acquire Coffeeheaven International for £32m as it aims to expand its existing presence in Central and Eastern Europe.
The group, which also operates the budget hotel group Premier Inn, said it was in "advanced discussions" that could lead to it acquiring the chain for 24p a share.
Coffeeheaven has 92 sites, with 62 in Poland and the remainder in Czech Republic, Bulgaria and Hungary. The chain, which is based in Poland but listed in London, trades as Coffee Nation in Latvia.
In the six months to 27 August, Whitbread opened 100 Costa Coffee outlets, taking it to nearly 1,000 in the UK and 400 more overseas. Over the period, it grew total sales by 20.6 per cent to £155.4m.
Whitbread said there was "no certainty that an offer will be forthcoming", though a deal has been rumoured for some time. The group is due to post its third-quarter trading update on Monday.