Sears, which owns the high-street chains Miss Selfridge, Wallis, Richards and Adams and the mail order catalogue business Freemans, said the offer "significantly undervalues" the company and urged shareholders to reject it.
The 340p a share bid has already been irrevocably accepted by Phillips & Drew Fund Management, Sears's biggest shareholder with a 22 per cent stake, unless a rival offer worth more than 360p is tabled. Other large shareholders also look likely to back the offer.
One said: "I would think the company will cease to exist in its present form." Another said Sears's chances of finding a white knight or raising enough cash from disposals to fight off the bid were less than 50 per cent.
"In the current retail climate, this is not a bad opening shot," it added. "It will be tough to mount a defence. Sears's form has been disappointing, and with 340p cash on the table you have to ask whether a bird in the hand is worth two in the bush."
The offer is being made through a shelf company, January Investments Limited, which is controlled by David and Frederick Barclay. Their other interests include the Ritz hotel and a stable of newspapers ranging from The Scotsman to Sunday Business.
Mr Green, who has been stalking Sears for two months, approached the Barclays before Christmas about helping to finance the bid. He will take a 20 per cent stake in the bid vehicle and is thought to be putting in about pounds 20m of his own fortune.
Mr Green said he would become chief executive of Sears after the bid, while Aiden Barclay, the son of David, will be chairman.
He would not be drawn on his plans for Sears, but it is expected that Freemans will be sold off. The potential buyers include N Brown, the rival UK catalogue retailer, and the German mail order group Otto Versand.
It is thought that the Barclays may also support the pounds 141m sale of Sears's store card business, Creation, to two French banks, which the existing management under chairman Sir Bob Reid announced earlier this week.
It also emerged yesterday that Mr Green's wife, Cristina, owns 1.8 million Sears shares. The 1.2 per cent stake was bought in September.