Interest from private equity firms, including TPG, impinges on Arcadia Group boss’ attempt to gain control of the UK retail empire.
US private equity firm TPG has told the Icelandic government that it is interested in acquiring the debt of around £1.5bn that Baugur owes to the country's failed banks.

Sir Philip's approach has also generated interest from other private equity firms with London-based Alchemy and European group Permira now both in the frame.

Baugur executive chairman Jón Ásgeir Jóhannesson has said that his company is such that 'the person that owns the debt, owns the company."

A number of private equity firms have been positioning themselves to benefit from the current situation following the evaporation of the leveraged buy-out market.

However, Credit Suisse does not believe that private equity groups and venture capitalists (VCs) will prosper in the retail market without the necessary expertise. "To date, VCs have not demonstrated to us that they have the necessary skill sets in retail."

Commenting on the situation with Baugur, Credit Suisse said: "We are not surprised that private equity interest has emerged. But even allowing for finance availability, this looks like the wrong time for VCs in this market."