Convenience store Nisa Retail has called in bankers from Lazard to explore a sale of the member-owned firm, according to reports.
The firm, which boasts 3,500 stores across the UK, has kicked off a project to shake-up its ownership structure, Sky News reported.
Read more: Nisa bags a nicer Christmas trading period
Nisa is currently owned by 1,400 members that have up to 250 shares each. It is understood the sale project may conclude without any significant changes to such a structure.
However, one source told Sky News the process was "akin to demutualisation".
The convenience store chain is putting the final touches to a £120m refinancing, which will cap a significant turnaround for chief executive Nick Read.
When he joined in 2015, Read took control of a loss-making operation. Last year, it recorded a £7.3m profit, generating sales of £1.3bn. It added 225 stores in the fourth quarter of its financial year. Profits this year are expected to be in the region of £8.5m.
Convenience stores such as Nisa or rival Costcutter are bracing themselves for the fall out from Tesco's mammoth merger with supplier Booker if it gets the go-ahead.
Tesco's vertical integration is subject to regulatory approval from the Competition and Markets Authority (CMA). A decision on a phase 1 investigation is set to be announced on 25 July. Regulators can then decide to open a more in-depth phase 2 probe into the deal.