Private equity group Permira is said to be poised to make a bid for the frozen foods arm of Unilever which includes Birds Eye.
Reports said Permira could agree a #1 billion deal with Unilever as early as today. The deal would end a 63-year association between Unilever and Birds Eye after the brand and much of Unilever's European frozen food business was put up for sale in February.
Among the other brands being sold along with Birds Eye is Iglo, although Unilever intends to keep the Findus business in Italy and Bertolli in the United States.
When it announced the sale, Unilever admitted it was a "tough call" to offload Birds Eye. The sale will impact on 3,500 workers, including those at its fish factory in Hull and frozen vegetable sites in Lowestoft.
The division has sparked interest from a number of suitors with a consortium of private equity firms Capvest, CVC Capital and Kohlberg Kravis Roberts (KKR) linked with a bid earlier in the summer.
But according to reports yesterday, Permira is close to securing a deal. However, it remains possible that other suitors could re-enter talks if the deal with Permira falters.
The decision to sell Birds Eye and the other businesses came after frozen food sales fell 4.5 per cent last year as consumers switched to fresh meat.
Despite the downturn in frozen foods, Anglo-Dutch Unilever posted a 28 per cent hike in annual pre-tax profits to 4.75 billion euros (#3.26 billion). Its other products include Magnum ice cream, Lipton Ice Tea, Hellmann's mayonnaise and Dove soap.
Earlier this month Unilever banked a 16 per cent rise in first half profits of 2.66 billion euros following a strong performance in India and China.
The company has been on the recovery trail since September 2004 when it shocked the City with the first profits warning in its history.