In a statement issued following pressure from the Takeover Panel, Mr Green said he had formed a private company called Medinbond with a view to making an offer for Sears.
It added: "Mr Green's company has received indicative letters of support from a group of private investors including Tom Hunter, the former chairman and chief executive of Sports Division, stating that if certain conditions are met, cash resources could be made available to facilitate an offer of 300p per share."
The statement added that "any offer, which would be wholly in cash, would be conditional upon completion of a satisfactory due diligence exercise and the recommendation of the Sears board".
Sears said the statement did not constitute an offer and that the true value of the company was not reflected by the 300p per share indicated.
Rea Brothers, the investment bank acting for Mr Green, said it was "disappointed" by the response. William Tebbit, one of Mr Green's advisers at Rea Brothers, said: "Their statement would indicate that they are not interested." Mr Tebitt is the son of Sir Norman Tebbit, the former Conservative Party chairman who is a non-executive director of Sears.
Sears' investors reacted coolly to Mr Green's offer. Robert Waugh of Phillips & Drew, which holds 24 per cent of the company, said: "It seems a strange way of going about a bid."
It is thought that major shareholders are unlikely to be interested at the 300-330p per share level. Some institutional investors feel Sears is likely to realise more value by selling Freemans, the store card and its property interests.
Nick Bubb of SG Securities was also sceptical that a full bid would materialise: "He'll do his due diligence and then try to get the price down but he is asking for the board to recommend it. That seems highly unlikely."
Mr Green is thought to have lined up potential buyers for the parts of Sears he is not interested in keeping. Buyers may include Otto Versand, the German mail-order group that may be interested in the Freemans home shopping business, and GE Capital, which may be interested in Creation, the Sears store-card operation. Sears shares yesterday closed 6.5p higher at 259p.Reuse content