The report in The Times that chairman Sir Bob Reid had rejected a £460m bid for the group was dismissed by the company as "entirely without foundation".

The company issued a formal statement saying that "it is not in discussion with any party for a bid for the company".

Nevertheless shares in Sears jumped 17.5p to 219.5p in early trading on hopes that an offer may be forthcoming.

Bidding low

Sir Bob Reid: at the centre of the controversy

The Times report said that Sears had been subject of a takeover bid worth at least 300p a share, compared to a share price which yesterday closed up 5.5p to 202p.

Sears denied there had been any offer.

A spokesman for Sears said that Sir Bob Reid's comments had been taken quite out of context. "Frankly, I think the whole thing is quite disgraceful," he added.

Mr Reid was quoted in the newspaper as deriding 300p as "a ludicrous price", adding that he is refusing to take seriously any offers below 500p a share.

The newspaper said the venture capitalists' proposal was not put to the Sears board.

Fair value

Sears' broker Dresdner Kleinwort Benson recently put the break-up value of the group at 325p a share and concluded that "fair value is over 300p".

The Times said the venture capitalist group would be talking to fund manager Philips and Drew - which holds a 24% stake in the company - to try to win support for the offer.

Mr Reid was quoted as saying that more than one approach was made to buy the business.

But Sears finance director said that no bid approach had been received.

One of Sears main rivals, N Brown Group, is said to have proposed a takeover of the company at 255p a share this autumn but the offer was also rejected.

Splitting up

Sears has instigated a radical shake up of its business over the past few years in an effort to improve its dire profit performance.

Its most famous asset, the flagship department store Selfridges, was floated separately on the stock market last year.

The group is also is aiming to sell its properties and credit card business. The Times said Mr Reid considers that the credit card and property business alone are worth some 200p a share.

Over the past few years Sears has been dogged by the poor performance of its troubled shoe business, which it has now largely disposed of.