(Bloomberg) -- A federal judge approved Nexus Capital Management as the lead bidder to acquire Big Lots Inc. after the private equity firm obtained $765 million in committed financing to support its proposed acquisition of the discount retailer out of bankruptcy.

Judge J. Kate Stickles said Friday that she would approve the deal, which is in the form of a so-called stalking horse bid. That means it’s subject to better offers, should any materialize before a noon deadline on October 28.

The deal was approved after Nexus spent the last several days with Big Lots and its lenders completing the financing in support of its takeover offer. The financing commitments announced Friday and court approval of Nexus’ bid puts the Los Angeles-based private equity firm in a good position to acquire the discount retail chain as part of an effort to turn around the business.

Nexus securing the committed financing for Big Lots is “fantastic news,” Stickles said. The proposed sale would pay off a substantial portion of Big Lots’ debt and preserve thousands of jobs, according to court documents.

The retailer has been in contact with more than one potential bidder, an attorney for Big Lots said in court Friday. The new bid deadline is Monday and if the company gets more than one offer, the auction will start on Wednesday, Oct. 30.

The case is Big Lots Inc., number 24-11967, in the US Bankruptcy Court for the District of Delaware.

--With assistance from Steven Church.

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