PART of a bed-making factory in the region could soon be taken over by rival Slumberland.

The Dunlopillo firm, which employs 320 workers at its Pannal site in Harrogate, North Yorkshire, has confirmed that it is in talks with an "interested party" about a possible acquisition of part of its business.

The company is one of the spa town's largest private employers, with a turnover of £25m, and has won the Queen's Export Award for industry.

High profile customers of its luxury mattresses and beds include Harrods, John Lewis Partnership, Allders, Selfridges and House of Fraser.

Although a Slumberland spokesman at its Oldham factory would not comment yesterday, it is understood that its Swedish parent company Hilding Anders AB is involved in negotiations to buy Dunlopillo's consumer plant.

One report suggests a deal could be completed by the end of this month.

The talks have fuelled speculation about the future of the Pannal site amid fears that, if the deal went ahead, it could be relocated.

Earlier, Slumberland had said the plant would remain in Pannal for the forseeable future.

A spokeswoman for Dunlopillo said: "Nothing has been decided. We are always receiving interest in the company because it is such a successful one."

Dunlopillo was taken over by its management in 1997 in a £23.5m buy-out.

Slumberland UK merged with Hilding Anders AB two years ago, making it the country's biggest bed and mattress- making company. After Hilding Anders merged with APAX Inressenter AB four years ago, it became the largest European maker. Its turnover last year was £267m.