WH Smith will decide the fate of its 233 year-old high street chain within days, as it holds final discussions with the two remaining bidders for the business.

Sky News has learnt that WH Smith will announce as early as next week that it has agreed the outline of a deal to sell its roughly 500 high street stores to either Alteri Investors, the owner of Bensons for Beds, or Modella Capital, which owns retailers including Hobbycraft.

Insiders said the process was “too close to call”, with both bidders understood to be in serious contention to take control of one of Britain’s most prominent retailers.

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Alteri and Modella Capital both specialise in buying troubled retailers, with the latter having recently bought The Original Factory Shop as well as joining the bidding for family-owned Lakeland.

The auction is being handled by Greenhill, with London-listed WH Smith – which was established in 1792 – choosing to dispose of the high street arm to focus on its more profitable travel retail operations.

Whichever bidder buys the chain would be expected to conduct major surgery on it.

Employing about 5,000 people across the UK, the sale talks kicked off in January, as Sky News revealed at the time.

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It specialises in selling items such as greeting cards and stationery.

The deal will trigger a change of name for the high street arm, with retail executives speculating that WHS was one possible alternative brand.

WH Smith, Alteri and Modella all declined to comment.