Debenhams and Selfridges attract fresh bidders

Debenhams, the department store group already in bid talks, has received a new approach from a consortium working with the retail entrepreneur John Lovering.

CVC and Texas Pacific Group, the venture capital houses, made the approach to Debenhams a couple of weeks ago and have now been given access the books. The retailer already has an indicative offer of 425p a share from Permira, another private equity player, valuing the group at £1.5bn.

Elsewhere in the sector, Selfridges is also set to be the subject of a two-way bid battle. The property tycoon Robert Tchenguiz is expected to come up with an offer for Selfridges by Friday, through his Aletheia vehicle. Mr Tchenguiz had been part of the auction of Selfridges but that was initially won by a £628m bid from Galen Weston, a Canadian billionaire, after Aletheia's backers fell away. Now it is understood the Mr Tchenguiz has won institutional support for his bid and debt financing from Royal Bank of Scotland. Industry sources said Mr Tchenguiz faced an uphill struggle. Not only must his money be in place by Friday, but also his rival is well positioned. Mr Weston enjoys the recommendation of the Selfridges board and speaks for 32 per cent of the shares. A Selfridges spokesperson said: "We have recommended an attractive offer. It's the highest we received. If things change, we'll obviously act in the best interests of our shareholders."

At Debenhams, there is as yet no firm offer on the table but both sides are now on an equal footing. The company's chief executive, Belinda Earl, and finance director Matthew Roberts, had been co-operating with Permira. Now the directors have also met the CVC/TPG team, who have been given as much information as Permira, after they convinced the Debenhams board that, subject to due diligence, they too could get to at least 425p a share.

CVC/TPG has brought in John Lovering as an adviser. The chairman of the Peacock Group cut-price retailer, he recently tried, unsuccessfully, to buy the supermarket chain Somerfield. He has worked in the past closely with Permira but relations between them are said to have soured.

Mr Lovering did not put together the CVC/TPG consortium but he is now helping it to work up a bid. If it is accepted, he will be a senior non-executive at Debenhams. Similarly, Permira has lined up an experienced retail executive, Stuart Rose, to come in as a non-executive chairman if it bags Debenhams.