The owners of Peacocks Group are understood to be considering a sale or refinancing of the value retail group.
Peacocks’ shareholders, which include US hedge funds Och-Ziff and Perry Capital, have approached several investment banks to explore a potential recapitalisation of the chain, according to the Sunday Times.
It is believed that the backers could scoop a £200m windfall from the recapitalisation of the business which includes the Bonmarche discount chain.
The hedge funds, along with Goldman Sachs, which together own 55% of the business, acquired Peacocks in 2006 for £404m, backed by £285m of bank loans and £110m of junior debt provided by Och-Ziff and Perry, according to reports.
The management team, which is led by chief executive Richard Kirk, own the remaining 45% of the shares. It is believed that the management would retain their stake and continue to be involved in the running of the business.
City sources estimate that Peacocks has soared in value and could be worth £600m. The retailer could undergo a debt for equity swap or bring in new investors.
In 2008, £20m was invested in to the business by its backers in return for a new set of banking covenants.
In November 2007, Kirk postponed a potential £800m sale of the business because of turmoil in the debt markets. At the time, potential bidders are understood to have included Bahrain investment fund Arcapita and private equity houses PAI and Cinven.
Peacocks has 524 stores in the UK and plans to open 50 new stores by 2011.