The buyout firms behind the discount high street chain B&M Retail and the bootmaker Hunter are vying to buy the owner of Goldsmiths and Watches of Switzerland.
Sky News has learnt that advisers to Aurum Holdings have shortlisted a handful of potential buyers, including Clayton Dubilier & Rice and Searchlight.
Talks with potential buyers of Aurum, which controls some of Britain’s biggest high street luxury watch and jewellery retailers, are ongoing, with a deal possible by the end of the year.
The sale process, initiated by Aurum’s current owner, Apollo Global Management, comes on the back of a post-EU referendum sales boom as an influx of foreign tourists lured by the weak pound fuelled demand for premium watches.
Bridgepoint and KKR, two other private equity groups, have also been touted as possible bidders for Aurumn, although it was unclear on Thursday whether they were involved in the auction.
Aurum, which also owns the Royal Warrant-holder Mappin & Webb, could be worth more than £600m, according to some retail analysts.
The company is expected to make a profit of about £60m this year, and last week announced the acquisition of Mayors Jewelers in the US for just over $100m.
One source described that as a “transformational” deal for Aurum’s US prospects.
The company, which is the UK’s biggest retailer of Rolex watches, was a big initial winner from the fall in sterling after last year’s vote to leave the EU, seeing luxury watch sales soar by 40% in the months immediately after the June poll.
A number of big watchmakers have increased their prices in the UK to offset the currency impact.
Aurum’s performance had already been on an upward curve prior to the EU referendum.
The company, which was bought by Apollo in 2012, trades from approximately 150 stores, including prime retail sites in central London, and employs more than 1,000 people.
“Brexit has been hugely beneficial,” Brian Duffy, Aurum’s boss, told the New York Times’ international edition last November.
“There are undoubtedly more tourists, and they’re looking to spend, because they’re confident in the value they’re getting.”
Aurum’s retail fascias are said to account for almost half of all British watch sales.
CD&R and Searchlight declined to comment, while Apollo could not be reached for comment.