A deal to buy all or part of UK distributor Sphinx CST is closer to being finalised, after rival Landis said it had pulled out of negotiations.
Landis confirmed that it was in talks with Sphinx, which were believed to be about its lucrative Cisco business. Two other companies are also understood to be in negotiations with the firm.
An industry source said the networking business would be an attractive and complementary fit to other distributors such as Ingram Micro or Northamber. Both companies declined to comment.
Sphinx is part of the Lynx group, which restructured last year. At that time it said it would sell off any part of its business which it considered to be "non-core".
Although Lynx remains tight-lipped about selling off its Sphinx arm, several sources close to the company have said it is no surprise that the subsidiary is up for sale.
"Sphinx hasn't been in Lynx's long-term business plan for some time, and that has been openly identified," said Brian Burke, manager at Computanet, a Dunn & Bradstreet company. "The business would benefit from more focus within a pure distribution environment. It could go well with a number of existing distribution outlets."
Speculation has hovered over Sphinx for the last few months after chairman Mike Briercliffe resigned. The subsidiary also came under scrutiny last year after a £5m error was discovered in its accounts which led to the resignation of finance director Grahame Benson.
Scott Dodds, managing director of Sphinx partner Acer, said: "Sphinx is a good ongoing partner for us and, if there has been a change, we would welcome whatever it is."
Sphinx was unavailable for comment.
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