Formation has confirmed to the London Stock Exchange that it has signed heads of agreement which "may or may not lead to the disposal of a material part of the Group, which may involve a number of subsidiaries".

The company did not name the prospective buyer, but it is believed to be David Kennedy, a British property developer who has gradually built up a 23% stake in Formation over the past two months. Kennedy entered a partnership with Formation's wealth management subsidiary, Kingsbridge, earlier this year to help identify investment opportunities for its wealthy sporting clients.

Formation is valued at 32m on London's Alternative Investment Market.