The owner of Homebase is mulling a sale of the DIY retailer after a takeover approach from The Range

It is understood that Hilco Capital, which acquired Homebase in June 2018, is set to start a formal process as talks continue, according to Sky News.

City sources told the news outlet that discussions “were not certain” to lead to an agreement.

Analysts added that if a deal were to be agreed, it is likely that The Range would want to acquire the majority of Homebase’s 145 stores.

One source said that the formal process, which will include other potential bidders, is expected to start “in the coming days”.

Hilco and Homebase have not yet responded to a request for comment and The Range could not be reached.

Hilco first acquired Homebase from Australian group Wesfarmers in 2018, following a loss-making period under the group’s ownership. It is understood that Homebase lost hundreds of millions of pounds during that time. 

Homebase then went through a company voluntary arrangement in 2018, during which it closed a number of stores, renegotiated rent agreements and cut around 1,500 jobs.

The Range’s rival and fellow value giant B&M is understood to have bid for Homebase in the past.

Homebase also has a presence in Ireland but the two divisions are expected to be sold separately, with Kingfisher having reportedly eyed a bid for the retailer’s Irish stores earlier this year.