Shares in High Street department store Debenhams leapt more than 25 per cent yesterday after the company said it had received a takeover approach.

The announcement came just hours after upmarket department store Selfridges announced its board was recommending a £598 million takeover from Canadian billionaire Galen Weston to shareholders.

The indicative offer from private equity firm Permira valued Debenhams at 425p a share or £1.54 billion - 28 per cent higher than its value at the start of trading yesterday.

The proposal initially boosted Debenhams share price by 84.25p to 415p - adding £306 million to the value of the company. They closed at 409.25p.

A statement from Debenhams said there could be no certainty a firm offer would be made as the proposal was subject to a due diligence process.

The news came just an hour after a second bidder entered the race to take over upmarket store chain Selfridges.

Aletheia Partners - linked in reports to businessman Robert Tchenguiz of Rotch Property Group - said it was considering making a bid after the company earlier announced it was recommending shareholders approve Mr Weston's offer.

Mr Weston, whose family owns London luxury food store Fortnum & Mason, emerged over the weekend as the favourite to win Selfridges' hand with an offer thought to be worth £570 million.

Last month Debenhams posted pre-tax profits of £96.5 million in the six months to the beginning of March.

The approach marks the latest twist in a complicated saga which has seen some of the UK's bestknown department stores receive approaches.

In January, retail entrepreneur Tom Hunter shelved takeover plans for House of Fraser after "substantive discussions" failed to materialise but the move immediately prompted speculation that he would make a move for Allders.

That speculation came to an end the following month when he announced his investment vehicle West Coast Capital had failed to strike a joint takeover deal with Scarlett Retail which was itself in the process of buying the chain.

Attention soon shifted to Selfridges when it announced last month that it had received an approach from an un-named bidder.

The company issued a statement after an unexplained five per cent rise in its share price.

While speculation again linked Mr Hunter's name to the move, it was Galen Weston who appeared to win the day yesterday.

Last week another well-known Oxford Street name, Austin Reed, said it was no longer in talks over a potential takeover.