Color Tile received a buyout proposal.

The retailer, which operates more than 800 stores selling home-improvement items, said it received a proposal from an investor group led by Merrill Lynch Capital Partners to buy the company at $25 a share in cash. The investor group also consists of certain members of Color Tile’s senior management and shareholders who own about 25% of the company’s outstanding stock. As of May, the company had 9.5 million outstanding shares.