BAIN Capital and Doughty Hanson, the private equity groups, are in exclusive negotiations to buy the Caudwell group, the phone empire of billionaire tycoon John Caudwell, for about £1 billion.

The phone group, whose companies include the Phones 4 U chain, is understood to be just weeks away from an announcement about a deal with the two groups, which saw off competition from rival private equity consortium, Providence and CVC.

Though the pricing was unclear last night, negotiations are thought to be not far off the £1 billion mark.

The deal — which could yet fall through — will seal a huge payout for Mr Caudwell who owns 85 per cent of the business. His brother, Brian, who owns 10 per cent, and the group’s finance director, Craig Bennett, who owns 5 per cent, will also secure payouts.

The phone empire, which also includes 20:20 Logistics, a handset distribution division, and Dextra, a mobile accessories distribution business, was founded by the Caudwell brothers in 1987 as Midland Mobile Phones.

Like Carphone Warehouse, its main rival, it rode to success on the initial wave of mobile phone uptake and last year turned over £2.12 billion.

John Caudwell, a former used-car salesman who lives in Broughton Hall, a £10 million Grade-1 listed Staffordshire mansion, wants to sell out to move on to new ventures outside the telecoms arena and to fulfil personal ambitions.

The entrepreneur, whose personal wealth is already valued at around £1.6 billion, is the main rival to Charles Dunstone’s Carphone Warehouse.

Mr Caudwell, who is being advised on the sale by NM Rothschild, disposed of a chunk of the business earlier this year. The fixed-line business, Homecall, went to Pipex, the broadband and hosting company, for £40 million.

The rest of the empire attracted interest from an array of private equity firms, which like the steady, reliable revenues of such businesses, though some questioned the price tag.

Some also questioned whether the success of Carphone Warehouse, whose main mobile business continues to boom, had forced Mr Caudwell to sell — something he denies.

The Caudwell Group sale is the latest in a spate of telecoms company sell-offs over the past year including O2, the British mobile company, which was sold to Telefónica in a record £17.7 billion deal, Onetel, the Centrica-owned telephone business that went to Carphone Warehouse and Your Communications, which was sold by United Utilities to Thus, the ScottishPower spin-off.

A spokesman for the Caudwell Group declined to comment.

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