Borders U.K. has refused to comment on a newspaper report that the chain is "in advanced talks" with private equity firm Valco Capital Partners over the possible sale of its stores.

According to the Independent, Valco, a division of "distressed debt specialist" Hilco, "plans to acquire the entire shareholding of Borders U.K.," which will include Books Etc and Borders Express shops. Up to two other companies are believed to be in "separate discussions" with Borders.

Valco Capital Partners is thought to have identified value in keeping Borders running, and is keen to retain the existing management team, including the chief executive Philip Downer.

Borders U.K. is now subject to what the Independent described as "feverish" speculation, following confirmation this week that it planned to close five branches, including its flagship Oxford Street store, a story also reported first in the Independent. Although the new move will safeguard "hundreds of jobs," it is thought likely there will be further store closures.

In March, Borders appointed the restructuring company RSM Bentley Jennison to review its business and what value it could extract from its portfolio of stores. Last month it brought in Clearwater Corporate Finance to find new investment, but denied that it was intending to sell the business. The Independent reports that its main bank Landsbanki is keen to sew up a deal in the coming weeks. Valco and Borders refused to comment to the Independent.