London-based private equity company TDR Capital is in exclusive discussions to acquire Italian discount retailer Acqua & Sapone from US investment firm HIG Capital, Bloomberg has reported.

The development comes as TDR outbid competitors CVC Capital Partners and Clayton Dubilier & Rice (CD&R) for the Italian company. 

Acqua & Sapone operates 800 retail locations across Italy, offering household and cosmetic products, and could be valued at €1.3bn ($1.4bn).

The discussions, while advanced, are not yet final and may not materialise.  

Financing for the deal is expected to come from debt packages of €800m, to be replaced with high-yield bonds in the future. 

TDR Capital emerged as the frontrunner in a competitive bidding process.

Spokespeople for TDR, CVC, CD&R, HIG and and Acqua & Sapone have declined to comment on the ongoing negotiations.  

Founded in 1992 by the Barbarossa family in Milan, Acqua & Sapone was partially sold to HIG Capital in 2021 for an undisclosed amount. 

The company’s founding family continued to retain a minority stake.  

TDR is also nearing a deal to purchase a stake in Asda from gas station billionaire Zuber Issa. 

In February 2024, TDR acquired a majority stake in UK pet supplies chain Jollyes.