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Dixons Poised To Cut Losses On Pixmania

(c) Sky News 2013

Dixons Retail (Other OTC: DSITY - news) will on Thursday call time on its loss-making European digital operation by announcing that it has found a buyer for the business.

Sky News has learned that the electricals retailer will say alongside its first-quarter results that it is minded to recommend an offer for Pixmania that will bring down the curtain on efforts to transform its fortunes.

Pixmania, which operates in France and the Czech Republic, has acted as a drag on Dixons' results for some time despite the company's move last year to take full control of the operation.

The group owns the Currys and PC World chains in the UK, the performance of which has improved in recent times under Sebastian James, chief executive.

The buyer of Pixmania, which lost nearly £20m in 2012, is a Europe-based private equity firm, insiders said. A deal remains subject to approval by its works council in accordance with French law, they added.

BNP Paribas (Milan: BNP.MI - news) , the French bank, has been overseeing a contract race to identify a buyer for Pixmania in recent weeks.

Dixons is the UK's biggest electrical goods retailer and also owns Elkjop in the Nordic countries, UniEuro in Italy and Kotsovolos in Greece.

Humphrey Singer, Dixons' finance director, confirmed at the company's full-year results in June that it would pursue an exit from the business.

"We certainly would be interested in ways in which we could exit through a sale process. I think closure in France is extremely difficult so it is right for us to explore all the other avenues before we contemplate that, but ultimately that is an option."

Dixons, which was forced to take a £135m writedown on the value of Pixmania at its full-year results, declined to comment further on Wednesday night.