Market speculation suggests Ashley would be appointed chief executive or chairman of the enlarged Blacks Leisure, which is expected to retain its listed status. He would also be the majority shareholder.
Last week, he revealed he had built up a 29.4 per cent stake in the outdoor business, but his intentions were unclear. He has built up stakes in several large companies, including John David Group and JJB Sports, in recent months but his stake building has never led to an offer. Merrill Lynch is understood to be advising Ashley on the deal.
Ashley is understood to have drawn up plans for a similar deal with Matalan last year. The deal is believed to have fallen through because Ashley and Matalan's founder and majority shareholder John Hargreaves were unable to agree upon terms.