Citing people with knowledge of the situation, the Financial Times said Sun European has offered £35m and a deal could be finalised as soon as Tuesday.
The newspaper has previously reported that Topshop owner Sir Philip Green, Dreams founder Mike Clare –who is backed by private equity firm Apollo Management – and Royal Bank of Scotland’s private equity unit were on the short list of bidders.
The report added that Claire is “waiting in the wings”, no deal has yet been signed and the situation could still change.
It also said that a deal with turnaround specialist Sun European would be in the form of a so-called pre-pack administration involving store shutdowns and layoffs.
Sun European already has furniture retailers ScS and Sharps in its portfolio.
Exponent bought Dreams for £230m at the height of the buyout boom, and has since struggled with the business amid a slowdown in consumer spending.
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