PRIVATE EQUITY firm Sun European Partners is close to acquiring Dreams, the beds retailer, through a pre-pack administration for £35m.
Ernst & Young, the business advisory firm that was instructed to find a buyer for Dreams last year, is expected to announce it has been appointed as administrator today.
Sun European, which also owns SCS Upholstery, is then expected to immediately take control of 170 of Dreams’ 260 stores, safeguarding more than 1,500 jobs.
That will leave the remaining loss-making 90 stores in administrators’ hands, putting hundreds of jobs at risk.
Sun European will have beaten off competition from Mike Clare, the founder of Dreams, who was working on a bid with buyout firm Apollo Management.
Sources close to the situation told City A.M. the private equity firm was chosen over Clare because the proposed model offered “more certainty” to Dreams’ future.
The retailer is owned by Exponent private equity and backed by Royal Bank of Scotland and Barclays.