Dreams bidders bed in on £400m takeover deal

Dreams has piqued the interest of rival Chinese mattress-makers and a UK manufacturer in the first round of bids for the business.

The mattress retailer, which was put up for sale in January and has drafted in Rothschild to handle the auction, is understood to have received bids from Chinese mattress manufacturers and competitors MLily and King Koil China.

MLily is the biggest memory foam mattress manufacturer in the country and recently signed a five-year sponsorship deal with Manchester United, while private equity firm Advent bought a majority stake in King Koil in November last year.

According to The Telegraph, these first-round bidders are joined by UK mattress-maker Silent Night, which is already a supplier for the retailer.

It is understood that South African giant Steinhoff also mulled a takeover of the retailer as part of its clutch of bids for retailers including Argos and Darty and acquisition of Poundland.

However, the business, which already owns Bensons for Beds and Harveys, has since abandoned the bid due to competition concerns.

Dreams was bought out of administration by Sun European in 2013 and has since delivered a dramatic business turnaround, posting a 136% leap in pre-tax profits to £31m in March.