Toys R Us is in talks to sell its growing Asian business to its local partner, Fung Group, according to insiders. 

The US chain is in discussions to offload its 85% stake in the Asian venture to Hong Kong’s billionaire Fung brothers, who own the remainder of the business, according to people with knowledge of the matter. A deal could give Toys R Us Asia a valuation of at least $1b, according to reports.

The tycoons’ private holding company, known as Fung Group, is reported to be considering finding partners to join it in the purchase. If a deal is reached, Fung Group may seek an initial public offering of Toys R Us Asia after one to two years.

Toys R Us and some of its North American subsidiaries filed for bankruptcy in September, though the Asian unit wasn’t included in the proceedings. Growth in the Asia Pacific region helped offset weak sales in the US and Europe in the quarter ended 28th October. The company last year combined its Japanese business with the broader Asia venture, which now operates more than 400 outlets throughout the region, its website shows.

No final agreements have been reached, according to the sources, and talks could fall apart, or another buyer could emerge.