Shares in Macy’s surged $3.13 to $43.16 yesterday amid speculation that Kohlberg Kravis Roberts (KKR) was planning a $27 billion (£13.2 billion) takeover of the world’s biggest department store owner.

It was thought that the private equity group was in the early stages of such a venture and that an approach to Macy’s had not yet been made.

According to sources, no price had been decided and there was no certainty that a deal would follow.

KKR, which has only just funded a £11.1 billion bid for Alliance Boots, is thought to be keen on Macy’s because more than half its property portfolio is freehold.

Most notably, it owns a huge store in Manhattan.

However, it has been struggling to integrate its recent acquisition of May Department Group, a rival retailer, which it bought for $11 billion two years ago.

It has also suffered from a slide in its key home furnishings business, a division that has shrunk 7 per cent since the May Department deal, as American shoppers grapple with surging fuel prices and higher mortgage repayments, which have forced them to curtail their spending.

KKR has sought to build its retail portfolio of investments on both sides of the Atlantic.

In May it sealed the first private equity acquisition of a FTSE 100 company when it seized Alliance Boots.

Before that, it had joined a consortium seeking to buy J Sainsbury, the supermarket chain.

It also owns Toys ‘R’ Us, the toy retailer. This month KKR unveiled plans to raise $1.25 billion in a flotation in New York.

Last year Macy’s, which owns 858 department stores across America, reported sales of $26.9 billion, with net income of $1.3 billion.

The group dates back to 1858, and one of its owners, Isidor Straus, died on the Titanic.

It is known for having persuaded President Franklin D. Roosevelt to fix the day on which Thanksgiving celebrations fall each year to ensure the same number of shopping days in November.

Ralph Lauren worked as a sales assistant in one of its stores in 1957.

Macy’s said that it refused to comment on speculation. KKR declined to comment.

Store of history

1858 Rowland Hussey Macy opens his “fancy dry goods” store in New York City

1862 introduces first instore Santa

1902 moves to nine-storey building with 33 elevators and four escalators

1924 first Macy’s Thanksgiving Parade

1994 joins Federated Department Stores to create America’s largest department store chain

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax