Ares Management LLC, which owns the majority of Guitar Center Holdings Inc.’s debt, is in advanced discussions with Guitar Center owner Bain Capital to take over the company, the Wall Street Journal reported yesterday. The two investment firms are in the final stages of hashing out a deal to convert the Guitar Center debt that Ares owns to equity, a process they are trying to complete outside of bankruptcy court while also keeping valuable tax breaks. Under the terms being discussed, Bain would keep a minority stake in the company, but the exact size wasn't clear. Guitar Center has about $1.6 billion in debt, much of it stemming from Bain's $2.1 billion leveraged buyout of the company in 2007. But the 253-store U.S. chain faces competition from e-commerce, and debt payments are eating into its cash flow.