Duke Street Capital, the private equity group, is in negotiations with the management of Galaxie, a French hotel group best known for its bed and breakfast economy hotel chain, on a deal valued at up to €200m ($219.8m).

François Brannelec, the head of Galaxie, confirmed that he had been in talks with Duke Street Capital but said negotiations were at an early stage. "We have been talking to them but haven't made any decisions. If the talks break down there are a number of other interested parties," he said.