Hedge funds controlling more than a quarter of the shares in DFS, the UK furniture retailer, are expected to vote in favour of the revised £507m (€747m) buy-out offer made by Lord Kirkham, the company's chairman.

One London-based merger arbitrage hedge fund manager said: "Investors who are not going to accept the offer have been selling shares and they have been snapped up by hedge funds, which now have somewhere between 15% and 40% of the company. I expect them to accept Kirkham's offer."