Automotive Holdings Group is closing in on a deal to sell the retail arm of its Covs Parts business to national auto parts seller Burson Group.
It is believed a heads of agreement will be announced once Burson completes its $300 million listing on the Australian Securities Exchange later this month.
AHG said two weeks ago it was in exploratory discussions about selling the 27 retail outlets after being approached by prospective buyers.
The potential deal with Burson is understood to exclude Covs' parts distribution business. AHG does not consider the stores a core part of its business and would offload them if the price was right.
Industry sources say auto parts brand owners Metcash and Super Retail Group had run the ruler over Covs but did not go further.
Burson Group is keen to pick up stores in WA, where it does not yet have a presence. Its float prospectus includes a target of 175 outlets nationally.
Both Burson and Metcash are reported to have approached WA's Veale Auto Parts regarding a potential sale. AHG had in the past also taken a look at the 16-store chain owned by Terry Veale.
AHG bought Covs from Coventry Group in 2011 for $29 million. The retail part of the business is estimated to make up less than a third of its value.
The flurry of activity is likely to lead to more consolidation in the auto parts market. Metcash's Automotive Brands Group last month snapped up MALZ Motoring and Leisure Zone from receivers for about $2 million.