House of Fraser is in advanced talks to be acquired by French department store chain Galeries Lafayette.
House of Fraser and Galeries Lafayette are in exclusive talks until the end of January, according to the Financial Times.
House of Fraser, who has also been gearing up to float on the London Stock Exchange, will hold a dual process while the talks continue.
The department store has hired Rothschild to manage the process and has been holding a beauty parade for advisers in recent weeks.
House of Fraser chairman Don McCarthy is understood to be looking for a £450m price tag for the group.
Earlier this year, House of Fraser attracted the attention of Sports Direct founder Mike Ashley, who was eyeing a minority stake in the department store. It has also previously held talks with Qatari investors.
Galeries Lafayette, which has 65 stores, was unsuccessful in its €1.6bn (£1.4bn) attempt to buy French department store Printemps.