Baugur has stepped up its takeover interest in Saks, the New York-based luxury retailer, by hiring NM Rothschild and Financo, a US corporate-finance boutique, to advise on the deal. Sunday Times

The privately owned Icelandic company announced at the end of last month that it could make a joint bid with Dubai’s Landmark Group. It is thought they are working with Sir Tom Hunter, Scotland’s richest man.

City sources cautioned that no decision had yet been made about whether to press ahead and insisted that it was unlikely the pair would make a move before Christmas.

It is expected that any takeover bid for Saks would be worth between $3 billion (£1.4 billion) and $4 billion.

The retailer operates department stores across America under brands such as Saks Fifth Avenue, Off 5th and Club Libby Lu (CLL). It sells clothes, shoes, accessories, jewellery, cosmetics, gifts and home furnishings.

Baugur has built up an 8.5% stake in the high-end retailer. Landmark, which owns hyper-markets in India, has just over 1% of Saks stock.