BC Partners is set to decide next week whether it will make a bid for Phones 4U, which is expected to fetch a price of up to £700m (€826.4m).
Phones 4U was founded in 1987 by brothers John and Brian Caudwell and has become one of the largest independent mobile phone retailers in the UK, with 450 stores.
According to the Financial Times, rival private equity firm Blackstone and trade bidders such as Everything Everywhere have pulled out of the auction for mobile phone company Phones 4U, which is owned by Providence Equity.
BC Partners is understood to be in competition for Phones 4U with at least one other trade bidder, although some sources have said that BC Partners is the last firm standing.
Providence bought the company for £1.4bn in 2006, which included the £347m sale of Phone 4U’s 20:20 distribution business to Doughty Hanson.
Phones 4U earns most of its earnings from its insurance business, which has seen sales drop in the recession. Refurbishing stores and integrating acquisitions has also increased costs.
But despite these challenges, Phones 4U recovered this year and posted a 45 per cent increase in EBITDA to £59.5m in the first six months of this year.
BC Partners has lined up more than £400m of debt for the Phones 4U deal, at least half of which has come from Deutsche Bank.