The phone group, whose companies include the Phones 4 U chain, the main high street rival to Charles Dunstone’s Carphone Warehouse, is to be sold for around £1.1 billion to Providence Equity Partners and Doughty Hanson.

Providence is to take the Phones 4 U chain.

The group had entered exclusive talks with Doughty and Bain Capital. However, Bain fell out of the bidding at a late stage for undisclosed reasons.

An announcement on the sale is expected next week.

The empire, which is being advised by NM Rothschild, is attractive to private equity firms because of its steady, reliable revenues.

Results published this week from Carphone Warehouse, which reported a 42 per cent rise in revenues during the first quarter, showed the continued strong revenue available from the business model as people continue to buy handsets and upgrade to newer, more fashionable models.

The Caudwell empire, which also includes 20:20 Logistics, a handset distribution division, and Dextra, a mobile accessories distribution business, was founded by the Caudwell brothers in 1987 as Midland Mobile Phones.

Like Carphone Warehouse, which has a market capitalisation of £2.4 billion, it rode to success on the initial wave of mobile phone uptake.

The group, which , employs more than 8,000 people across the world. saw a 15 per cent rise in 2005 sales to £2.1 billion.

John Caudwell, a 53-year-old former used car salesman, who lives in Broughton Hall, a £10 million Grade-1 listed Staffordshire mansion, wants to sell out to move on to new ventures outside the telecoms arena and to fulfil personal ambitions.

The deal will seal a huge payout for Mr Caudwell who owns 85 per cent of the business. His brother, Brian, who owns 10 per cent, and the group's finance director, Craig Bennett, who owns 5 per cent, will also secure payouts.

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