The confirmation follows speculation in the Financial Times today that the two parties were poised to complete a deal which would see the furniture group dispose of its retail business for a nominal sum of£1. It is also expected that MFI will pay a dowry of about£200 million for the private equity company to take the troubled retail arm off its hands.
In a statement, MFI said it was in discussions with MEP, but a number of significant issues remained outstanding. It added that discussions may or may not lead to a transaction, which the board would consider along with other options for MFI Retail.
MFI first revealed in May that it was considering a number of approaches from third parties interested in its 200-store retail chain.