A London-based estate agent chaired by the former Sainsbury’s chief Justin King is on the brink of a deal to buy rival Marsh & Parsons.

Sky News has learnt that Dexters, which is privately owned, has been in talks for weeks with LSL Property Services, Marsh & Parsons’ London-listed parent company.

Sources said a deal could be struck as soon as Thursday morning.

If completed, it would add Marsh & Parsons’ roughly 30 branches to more than 70 operated by Dexters.

By some measures, a deal would make the combined group the biggest estate agent in the capital, one industry source said on Wednesday evening.

According to reports in 2011, LSL paid £50m for Marsh & Parsons.

The chain’s value in the transaction is expected to be approximately half that, according to the source.

The deal comes amid signs of a slowdown in the housing market, although parts of central London have been more resilient to date than the national picture.

Dexters is run by chief executive Andy Shepherd, but recently brought Mr King on board as chairman.

The former Sainsbury’s boss is also on the board of Marks & Spencer, and chairs Allwyn UK, the new operator of the National Lottery.

Dexters said it did not “comment on rumour or speculation”, while LSL also declined to comment.