Watford say takeover talks are under way with a mystery buyer.

Lord Ashcroft is in discussions over selling his stake in the Hornets' parent company Watford Leisure.

Ashcroft's company Fordwat is Watford's largest shareholder and a club statement said a deal would involve an offer for the whole business.

"[Talks are] at a very early stage and there can be no certainty that an offer for the company will be forthcoming," the statement added.

"A further announcement will be made in due course."

Fordwat possesses just over 37% of the club's shares, former chairman Jim Russo's Valley Grown Salads has almost 30% and Graham Simpson, also an ex-chairman, owns 16.79%.

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The Hornets came close to entering administration in December 2009 but were saved when Ashcroft paid £4.88m to settle a debt with the departing Russo.

Graham Taylor was elected non-executive chairman on a temporary basis after Russo stepped down and took on the role permanently in August this year.

After a fight against relegation from the Championship last season Watford made a bright start to the 2010-11 campaign but now sit 15th in the table.

Manager Malky Mackay has been forced to use a host of young players because of the club's financial restrictions.

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