Hussain Sajwani, who founded the company nearly two decades ago, has been exploring the deal since late 2019 after Damac's share price plunged over the past two years, one of the sources told Reuters on Tuesday.
Sajwani, who through his private investment company bought Italian fashion house Roberto Cavalli last year, currently owns 72.2 per cent of Damac, according to Refinitiv data.
He is in talks with banks to finance the deal, the same source added.
Damac did not respond to emailed requests for comment.
The developer, which predominantly operates in Dubai but also has assets in Saudi Arabia, the United Kingdom and elsewhere, has seen its share price fall by around 80 per cent, to just Dh0.69 ($0.19), since the start of 2018.
It recorded its first annual loss since 2010 last year, and has posted consecutive quarterly losses this year.
Damac listed Global Depository Receipts (GDRs) in London at $12.25 each in 2013, valuing the company at $2.65 billion. Shares were listed on the Dubai stock market two years later.
The bank recorded a significant turnaround in the UAE with a healthy operating profit of $242 million
Over the past year, Multiply Group has expanded its portfolio through a range of acquisitions, and strategic investments