Private equity house Merchant Equity Partners is poised to buy French furniture chain BUT from Kesa for more than 400 million (£278.2 million).

Merchant Equity, which typically targets ailing businesses, bought MFI’s retail division last year and BUT could be a complementary deal.

Owner Kesa revealed in July that it had been approached by suitors for BUT and appointed investment bank Lazard to handle the process, but there has been little news since.

BUT, which had posted weak results for some time, has picked up recently. The 112-store chain recorded a 14.9 per cent rise in retail profit in its first half to 24.7 million (£17.2 million). Its property portfolio also makes it attractive to private equity firms.

Would-be buyers Colony Capital and LBO France are both thought to have dropped out of the BUT auction, leaving the way clear for Merchant Equity.

No comment was available from Merchant Equity or Kesa.

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