Two private equity firms on Friday made a £1.66 billion takeover bid for department store chain Debenhams in a move which could spark a bidding war with rival Permira which had offered £1.54bn.

CVC Capital and Texas Pacific have offered 455 pence per share for the London-based operator of more than 100 stores which beats Permira's earlier offer of 425p per share.

The new offer is backed by the retailer’s chief executive and independent directors but city experts expect Permira to hit back with an improved offer.

In a statement released shortly after news of the rival bid emerged, the Permira consortium said it was considering its position and a further announcement would be made in due course if appropriate.

Debenhams last week posted a 3.9 per cent rise in second half same-store sales on the back of strong demand for its women's fashions.

The group said total sales for the six months ended August 30 climbed 7.7 per cent despite the summer heatwave, while for the full year, total sales climbed 6.7 per cent year-on-year with same-store sales up 3.7 per cent.