Landsbanki to sell off Hamleys and Iceland Foods

Hamleys is to be put up for sale by collapsed Icelandic bank Landsbanki.

Iceland Foods, in which Landsbanki has a 67% holding, is also on the market.

Landsbanki is not saying how much it hopes to raise from either sale but market estimates put the value of Iceland Foods at around £1.5 billion.

Malcolm Walker, Iceland's founder and chief executive, seems certain to be among the bidders. The frozen food group made profits last year of £135 million.

Hamleys is harder to value. In 2010, the toy chain ended a six-year losing streak thanks to resurgent sales. It edged into profits of £100,000 on sales of £60 million.

Landsbanki - which collapsed in the Icelandic financial crisis and which is now managed by the Landsbanki Resolution Committee - has a 65% stake in Hamleys.

Retail Week said advisers are about to be appointed for the sales.

"We are at the very beginning of the process," said a Landsbanki spokesman.

Landsbanki said that its stakes in House of Fraser and Aurum - the company which owns Mappin & Webb, Goldsmiths and Watches of Switzerland - are not for sale. The collapsed bank owns 35% of House of Fraser and 66% of Aurum. A spokesman for Iceland Foods' Walker reiterated that he would be interested in leading a bid for the chain, but was unaware of any sale plans. Walker and other managers own about 24% of Iceland.

They made a proposal to buy the business for about £1 billion in the autumn but that was rejected by Landsbanki, a source familiar with the matter said.

Landsbanki came to own its stakes in the retailers after Icelandic investment firm Baugur - which bought out great swathes of the high street - went bankrupt in February 2009 and its assets were seized by the bank.