3i Group, the quoted private equity house, is hoping to buy Foxtons, London’s largest estate agent, in what could be a £400 million sale, The Times has learnt.

The UK private equity group is among suitors set to submit first round bids for Foxtons by the close of business today.

Foxtons hired investment bankers at Credit Suisse last November to explore a possible stock market flotation of the company, which is owned and run by Jon Hunt, its founder.

The involvement of 3i comes just weeks after the it failed in a £960 million management buy-out of Countrywide, Britain’s largest estate agent owner, whose brands include Bairstow Eves, Mann & Co and John D Wood.

Countrywide is now on the receiving end of a £1.01 billion bid approach from Apollo Management, a rival US private equity giant. 3i is understood to be monitoring the Countrywide situation.

Foxtons has put an asking price of about £400 million on the group, which takes in the Alexander Hall mortgage broker, a separately run business that is owned and controlled by Mr Hunt.

Other companies that are believed to have considered bids include Savills, the quoted up-market residential and commercial property firm. Speculation surfaced last spring that Savills had looked at Foxtons, valuing the firm at just £80 million. Savills, however, insisted that any talk of a deal was gossip.

Sources said that Foxtons would fetch somewhere between £300 million and £400 million. Both Foxtons and Alexander Hall were last year at the centre of allegations of sharp practices in the housing market aired in a BBC undercover documentary. The company denied the allegations, has since implemented a new training regime for staff, and this month joined the voluntary ombudsman scheme.

Mr Hunt, who founded the business in 1981, was paid £7.5 million in dividends over the past two years. Foxtons’ pretax profits for 2005 totalled £12.6 million. Analysts pencilled in profits of £25 million for Foxtons last year. According to its latest filed accounts Foxtons’ parent company, which takes in Alexander Hall, made just £3.8 million on turnover of £106 million in 2005.

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