London department store Liberty has confirmed that it is in talks with private equity firm BlueGem Capital Partners about a possible £32m sale of the business.

Liberty said today that it was in discussions about a potential sale to BlueGem, the investment fund backed by former Merrill Lynch Global Private Equity managing director, Marco Capello.

The proposed offer by BlueGem for each ordinary share in Liberty is 141.8p, valuing the business at £32m.

Any offer by BlueGem will be made following the approval by shareholders of the £41.5m sale and leaseback of Liberty’s Tudor-style building, on Great Marlborough Street, at Liberty’s general meeting on Monday.

The deal would bring to an end months of speculation over the future of the Liberty store, which was effectively put up for sale last July by its majority shareholder, property firm MWB, which hired Cavendish Corporate Finance and Global Leisure Partners as advisers.

In a Stock Exchange announcement Liberty said: “This announcement does not amount to a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made.”