A formal offer for Dutch retail conglomerate Vendex KBB is expected in two weeks, despite lacklustre sales and profits revealed on Tuesday.
A EUR16 (£10.50) per share bid has been tabled by a consortium of venture capital companies, including M&S chairman Luc Vandevelde's Change Capital Partners as well as Kohlberg Kravis Roberts and AlpInvest Partners.
The bid could lead to a break-up of the group, which comprises 1,766 stores across 16 retail chains and seven countries. Sales in the year to January 31 were flat, but increased 3 per cent to E 4.45 billion (£2.93 billion) once the contribution from Belgian DIY chain Leroy Merlin, acquired last year, was included.
Profits fell sharply from EUR239 million (£157.6 million) to EUR12 million (£7.9 million), hindered by restructuring at V&D department stores, which incurred a EUR119 million (£78.5 million) loss.
The retailer said: 'In the first half of the year, the recovery measures taken in the previous financial year (at V&D) proved too insufficient to be effective. A renewed management team took measures in the second half of the year, aimed at stopping the losses.'
Analysts now expect the consortium to complete due diligence in two weeks.
One said any break-up is likely to involve Vendex's supervisory board and Dutch trade unions, both of which will be keen to avoid redundancies and large-scale store closures.
Kingfisher is a possible candidate for the big-box Praxis DIY chain, as are big German DIY specialists such as Obi.