According to Retail Week, Baugur has appealed to the Icelandic courts to protect itself from its creditors, but buyers are already circling the profitable retail businesses.
Yesterday Landsbanki seized control of Baugur's shares in Iceland (14 per cent stake), House of Fraser (35 per cent stake), Aurum (38 per cent stake) and Hamley's (64 per cent stake).
It is understood that Arcadia chief Sir Philip Green and members of the Saudi Royal Family have discussed a rescue deal for the Hamleys although Green denied to that he had been in talks to buy the business in The Times.
Dragons' Den entrepreneur Theo Paphitis is believed to have held discussions with Hamley's management in December.
However, Landsbanki is understood to want to hold the stake for up to five years.