House of Fraser continues to interest potential buyers

House of Fraser described the interest by an unnamed suitor as "preliminary", but one which could eventually lead to a full takeover offer.

Newspaper reports have linked Icelandic investor Baugur with a possible takeover of the department store chain.

Separate takeover talks involving House of Fraser collapsed earlier this year.

In March, the company unveiled a small rise in annual profits, although it said sales - excluding new store openings - had fallen by nearly 4%.

'Press speculation'

House of Fraser has been at the centre of a number of takeover approaches in recent years, including one by Scottish businessman Tom Hunter, although no deal has successfully been sealed.

In a statement, the firm said: "The board of House of Fraser notes recent press speculation and confirms that the company has had a very preliminary approach that may or may not lead to an offering being made for the company."

The Times on Monday reported that Baugur, which is run by Icelandic entrepreneur Jon Asgeir Johannesson, was believed to be behind the latest takeover approach.

The acquisitive Icelandic firm - which has invested heavily in a number prominent UK retailers including Hamleys toy stores and Woolworths - snapped up 10% of House of Fraser shares last month.