WestLB behind Arcadia swoop

Robin Saunders, one of the City's best known deal-makers, has offered financial backing to Philip Green in his bid to seize control of retail group Arcadia.

It is understood that Ms Saunders, a senior director at German bank WestLB, has held a series of conversations with the billionaire retailer this month offering to provide debt financing.

Mr Green has already arranged a £700m loan from HBOS to fund the bid for the company that owns Top Shop, Dorothy Perkins and Burton Menswear.

WestLB declined to comment, but well-placed sources said that if the deal went ahead the bank may take on syndicated debt.

Ms Saunders could also take a personal stake in a deal. The US-born banker was one of Mr Green's backers when he bought Bhs in 2000. With a 1 per cent stake, she received a £1.75m dividend payment this year.

The pair have known each other since 1999 when WestLB backed Mr Green's unsuccessful bid for Marks & Spencer. They also see each other socially.

Ms Saunders was a guest at Mr Green's 50th birthday toga party in March, where Mr Green dressed as the Roman Emperor Nero. Ms Saunders later invited Mr Green to her 40th birthday party, based on an Italian medieval theme.

There is no certainty, however, that Mr Green's bid for Arcadia will succeed. Arcadia's chief executive Stuart Rose has rejected an initial 365p-a-share offer. Analysts believe that Mr Green may have to go up to 400p.

Analysts believe that Arcadia may rush out a trading statement in an attempt to push up its share price, which stands at 349p. But Mr Rose said: "I don't see the need to do anything at the moment. The ball is firmly in Philip's court. I'm not going to be bounced into anything."