Iceland bank sells 'eponymous' chain

The bank's resolution committee said yesterday it would start looking for advisers to sell its 67 per cent stake in the business, thought to be worth more than 1 billion.

Landsbanki spokesman Pall Benediktsson said the committee was "at the very beginning of the process," adding it was not certain a sale would go ahead or, if it did, that a deal would be completed this year.

The bank also owns a 65 per cent stake in toy emporium Hamleys, a 35 per cent holding in department store chain House of Fraser and 66 per cent of luxury retailer Aurum, but is understood not to be selling these stores in the immediate future.

Some reports have claimed that the bank is open to offers on Hamleys, but Benediktsson told The Scotsman: "Hamleys is not for sale, nothing is being done by the bank in that regard."

Landsbanki came to own stakes in British retailers after Icelandic investment firm Baugur, which bought out great swathes of the UK high street, went bankrupt and its assets were seized by the bank.

The bank is gradually winding up its assets and it is thought it is choosing to sell Iceland first because of its strong performance in recent years after founder Malcolm Walker returned to the company in 2005 and led a renaissance.

News of a possible sale appeared to take Iceland's management by surprise, but Walker is likely to be among any bidders for the chain he started in 1970.

Walker, who along with his management team owns about 24 per cent of Iceland, made a 1bn bid to take full control of the company last autumn, which is not believed to have been either accepted or rejected by Landsbanki.

A spokesman for Walker said he would be interested in leading a bid for the chain, but was unaware of any sale plans. He would have to be involved in any formal sales process.

Iceland last year reported record pre-tax profits of 135.4 million.