The private equity firm founded by Guy Hands, the veteran financier, is exploring an offer to buy Hotel du Vin and Malmaison, two of Britain’s best-known hotel chains.
Sky News has learnt that Terra Firma Capital Partners, which is now run by Mr Hands’ son, Richard, is among the suitors who have been in talks with advisers to the chain’s owner.
The prospects of a firm deal materialising were unclear on Thursday.
If a transaction did take place, it would be the latest in a string of prominent UK assets to have been owned by Terra Firma.
Among its investments – some of which turned out to be financially and reputationally notorious – were the music company EMI, the care homes operator Four Seasons Health Care and Annington Homes, the former owner of thousands of Ministry of Defence homes.
More recently, it has focused on managing Mr Hands’ family’s money, although it does still have some external investors.
The elder Mr Hands retired from his full-time roles at Terra Firma two years ago, having built it over several decades.
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His wife, Julia, is chair of Hand Picked Hotels, a collection of former stately homes which trades across the UK.
Its sites were acquired from Sir Richard Branson’s Virgin Group in 2001.
Malmaison and Hotel du Vin sit under the same ownership structure, and trades from 37 hotels in 27 UK cities, with the portfolio split almost equally between the two brands.
The chains have been through a succession of owners over the last 20 years, including the private equity firm KSL Capital Partners.
They are now owned by Singapore-based Frasers Hospitality Group, which reportedly paid more than £360m to acquire the group in 2015.
Among the other potential bidders for the chains has been Fortress Investment Group, Sky News reported several months ago.
Cushman & Wakefield (C&W), the commercial property agent, is handling the auction.
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A Terra Firma spokesperson declined to comment.
