DFS, the UK's largest sofa retailer, could be sold to UK private equity firm Permira and veteran retailer John Lovering in a deal valued at more than £500m.

Goldman Sachs, which is advising Lord Kirkham, the founder and owner of the Doncaster-based retailer, has invited a handful of buy-out houses to make bids for the company, which has benefited from the collapse of its rivals Land of Leather and MFI.

While private equity houses such as Apax have ruled themselves out of the running, Permira will have to contend with competition from Cinven, Advent International and Warburg Pincus, which are also considering making bids.

Any deal would trigger a big windfall for Lord Kirkham, who took the company private six years ago for £507m.

Daily Telegraph