Sky News has learnt CVC Capital Partners is in exclusive negotiations to acquire Jagex from fellow buyout firm Carlyle.

Headquartered in Cambridge, Jagex launched Runescape, a fantasy role-playing game, more than 20 years ago.

It has drawn well over 300m players during its existence, making it one of the most popular franchises of its type.

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City sources said CVC had seen off competition from a number of rival bidders and could sign a formal agreement to buy a controlling stake in the company within days.

The auction of Runescape's owner kicked off last year and drew interest from a range of trade and financial bidders.

Its other products include This Means Warp, a spaceship management game, and Melvor Idle, another adventure game.

One banking source said the deal had been orchestrated by CVC's sports, media and entertainment team and its UK partners as it explores new ways to invest in intellectual property assets with large international fan-bases.

The Luxembourg-based private equity firm has deployed similar models across a range of sports assets, most notably during its ownership of Formula One motor racing, which represented one of the most lucrative deals in the buyout sector's history.

CVC has since built a substantial portfolio across a range of sports, including in football, where it owns a stake in the commercial rights to the top flights in France and Spain.

It is also bidding against Blackstone in a similar contest in Germany's Bundesliga.

The firm, which has ambitions of floating in Amsterdam, has also bought a broad portfolio of commercial rights in rugby union, and also has an interest in women's tennis and international volleyball.

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During the Jagex sale process, a number of private equity firms were said to have expressed uncertainty about the company's business plan and development pipeline, denting hopes of it achieving a reported £1bn valuation.

Jagex has been owned by Carlyle since January 2021, and was reportedly considering an initial public offering before turning its attention to an outright sale.

Employing hundreds of people, it is run by chief executive Phil Mansell.

The auction has been run by bankers at Morgan Stanley and Aream & Co, a video gaming boutique adviser.

CVC declined to comment on Tuesday, while Carlyle has been contacted for comment.