Waterstone's is expected to find a new owner this week, concluding the long battle for the bookstore chain, writes Conal Walsh . PPM Ventures, the venture capital arm of the Prudential, was described last night as 'the likely candidate' to net Waterstone's in a £200 million deal. However a rival bid led by Luke Johnson, the restaurant entrepreneur, has not yet been rejected.

A source close to the bidding said Johnson had been told to revise his offer, which is backed by the Oxford bookseller Blackwell's. 'The door is still open for him, it depends on what he comes back with,' the source said.

PPM and Johnson are thought to be the only bidders left after three other bids were rejected by HMV Media, owners of Waterstone's, last week.

The PPM bid has evolved over several months after its original £180m offer was rejected in March. That offer was made in partnership with Tim Waterstone, the chain's founder, who is no longer involved in the bidding. HMV, which wants to sell the 200-outlet chain to cut its debts, also rejected a recent offer by rival bookseller Ottaker's. HMV, owned by record company EMI and venture capitalists Advent, would not comment yesterday. PPM and Johnson, the chairman of Belgo restaurants, also declined to comment.