THE futures of 350 workers at one of Sussex’s biggest employers hung in the balance last night as bosses tried to thrash out a takeover deal.

The country’s biggest wholesaler, Palmer & Harvey (P&H), which employs 350 people in Davigdor Road, Hove, was expected to be taken over last night.

Tobacco giant Imperial Brands was thrashing out a rescue deal to ensure the troubled wholesaler has a “sustainable future”.

The FTSE 100 company said it was working with “other stakeholders” to come up with a plan for the 90-year-old group, which is grappling with huge debts.

Reports suggest its debts are so bad that it owes key suppliers substantial sums.

P&H employs around 4,000 people and supplies cigarettes, alcohol, groceries and frozen food to 90,000 retailers, including Tesco supermarkets.

Davigdor Road is the company’s headquarters and it also has regional distribution depots around the country.

Imperial Brands, which owns Golden Virginia Tobacco and Rizla, said in a statement: “We have been working, together with other stakeholders, to seek to create a sustainable future for the UK wholesaler Palmer & Harvey, with whom we have a close trading relationship.”

Imperial Brands is said to be working with Japan Tobacco International (JTI) to throw a financial lifeline to P&H so it can push through a takeover by investment firm the Carlyle Group, according to Sky News.

Daniel Sciamma, managing director of JTI UK, said: “Palmer & Harvey is a major wholesaler of our products in the UK and JTI is pleased to confirm that we have, along with other key stakeholders, been able to assist Palmer & Harvey in consolidating its trading platform.”

The news comes at a time of change for grocery stores, with Tesco agreeing a £3.7 billion deal in January to merge with food wholesaler Booker.

However, the Competition and Markets Authority (CMA) announced in July that it would launch an in-depth investigation into the merger amid concerns that competition could be harmed in more than 350 areas where there is an overlap between Tesco shops and Booker “symbol stores”.

Imperial Brands said it was on track to hit its annual earnings targets, with shares in the firm down three per cent in early afternoon trading on the London Stock Exchange.

Co-founder of McColl’s convenience store chain, James Lancaster, is being tipped for a key role in the new management structure.

An agreement leading to a takeover of P&H would come as a relief to workers who have endured an anxious six months amid uncertainty about the financial health of their employer.