AN investment vehicle controlled by one of Europe’s wealthiest families is closing in on a deal to buy Scandic Hotels, the Scandinavian chain, for about $1 billion (£510m).

EQT, a Stockholm-based private-equity house controlled by the billionaire Wallenberg family, has emerged as the front-runner in the long-running sale of the hotel chain.

While it is regarded as favourite to agree a deal with Scandic’s current owner, Hilton Hotels Corporation (HHC), EQT does not have the field to itself.

Rival Scandinavian investment firm Nordic Capital and Terra Firma, the private-equity fund founded by financier Guy Hands, are also thought to be involved in the process, and insiders cautioned that EQT could yet be outbid.

Industry sources said that HHC hoped to be in a position to announce a sale of the chain within the next fortnight.

HHC acquired the operation, which runs 130 hotels, in February last year as part of its takeover of Hilton International, which owned the rights to the Hilton brand outside America.

The enlarged company appointed Citigroup, the investment bank, to find a buyer for Scandic last August.

Scandic’s hotels are mainly located in Sweden, Finland, Norway and Denmark. It had been widely expected that the brand would be most attractive to a local hotelier or investment firm, although a number of British companies have looked at acquiring the business, among them Cinven and Permira.

EQT has about €10.5 billion of funds under management. Its previous deals include buying several catering brands, including Harry Ramsden’s and Caffe Ritazza, from Britain’s Compass last year.

The Wallenbergs are among Europe’s most prominent investors. As well as the investments they make through EQT, they own stakes in some of the Continent’s largest public companies, including Astra Zeneca, the drugs giant, and Ericsson, the mobile-phone manufacturer.

As well as the Scandic disposal, HHC is also selling off a number of other European properties that it no longer sees as central to its business. These include sites such as the Hilton Barcelona. Collectively, the properties could fetch a reported £200m. The company has been concentrating on expanding into emerging markets such as India and China.

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