LONDON (AFX) - House of Fraser PLC said it has received a 'very preliminary approach' that might lead to a takeover offer for the UK's third largest department store group.

The retailer did not name its suitor but AFX News understands the tentative approach has come from Baugur Group, the acquisitive Icelandic group that last month purchased a 9.5 pct HoF stake in a 'dawn raid' orchestrated by Merrill Lynch.

A spokesman for Baugur declined to comment.

In a brief statement HoF said: 'The board of HoF notes recent press speculation and confirms that the company has had a very preliminary approach that may or may not lead to an offering being made for the company.'

The retailer made its statement after The Business newspaper said on Sunday HoF had hastily convened an emergency board meeting on Friday, prompting speculation the department store group faces a new takeover approach.

HoF, which has been pursued by several suitors in recent years, ended takeover talks with Apax Partners, the private equity firm, on March 17.

Baugur is no stranger to HoF's share register. It acquired a 10 pct holding from 2002 to 2003, before exiting with a tidy profit in 2004.

The Icelandic group also owns a 10.2 pct stake in Woolworths Group PLC the variety store retailer, and a 13.7 pct stake in French Connection Group PLC, the fashion retailer and wholesaler. It also owns a raft of UK retailers, including the Iceland supermarket chain and Hamleys toy store.

HoF shares closed Friday at 119 pence, up 3/4 pence, valuing the business at 281 mln stg.

Baugur paid up to 135 pence a share for its HoF stake. This means under UK takeover rules any takeover offer would have to be pitched at this level or above.

KD.

Received my cheque for the sale today. I shall watch what happens to my local store with interest. That's Cavendish House, Cheltenham. Rumour says all the stores will be rebranded.

RIP HOF

...... and the divis were quite respectable too....

......... not to mention the AGM lunches............