R Capital, owner of Little Chef, is thought to be in the running to buy hardware and homewares chain Robert Dyas.
The private equity firm R Capital joins value retailer Wilkinson who have both emerged as potential bidders. Some sources suggest there is international interest according to the Mail on Sunday.
Robert Dyas is expected to enter exclusivity with a buyer next month and it could be sold by early June.
The retailer has been up for sale since last year and is expected to fetch £25m. It is majority owned by its lenders after they conducted a debt-for-equity swap in 2009.
Robert Dyas posted £1.9m profit against £103m turnover in the year to the end of March last year.
Robert Dyas and R Capital denied discussions were taking place.