Mr Tchenguiz's bid vehicle, Aletheia Partners, had set a deadline of 1530 GMT on Friday to say whether it would trump the �598m deal agreed between Selfridges and Canadian retail mogul Galen Weston.

Shareholders are now expected to snap up Mr Weston's offer of 387p a share plus a 5.2p dividend.

Mr Tchenguiz, one of Britain's biggest private property owners, blamed uncertain trading conditions in the retail sector for his decision to walk away.

Relief

John Baillie, analyst at SG Securities, said: "Galen Weston has tied it all up. He's paying a pretty full price.

"It was hard to see anyone coming at this stage to really counter it. I think the institutions will sell... I think the offer will be successful."

Mr Weston's holding company Wittington Investments responded with relief to the news.

"We are delighted that this has now removed the uncertainty surrounding Selfridges," a spokeswoman said.

"Our offer, which is recommended by the Selfridges board, remains open until July 10.

"We look forward to receiving acceptances from shareholders."

Shares down

Wittington extended its offer deadline for the fourth time on Thursday after revealing it owned, controlled, or had acceptances for just under a third of Selfridges shares.

The firm has offered �598m cash plus �8m in dividend payments for Selfridges, which is best known for its flagship store in London's Oxford Street.

Selfridges shares ended the day 7.5p, or 1.9%, lower at at 387.5p.

Several UK department stores have been the subject of bid interest in recent months.

Financiers are keen to take advantage of cheap borrowing costs to buy stocks brought low by a downturn in consumer spending.