Sir Philip Green, the billionaire owner of TopShop and BHS, has bought a 28 per cent stake in menswear retailer Moss Bros.

Sir Philip told Times Online that he had bought almost 27 million shares in the company for 24.95p. He is now thought to be considering a bid for the whole of Moss Bros through investment vehicle Warbeck.

Shares in the men’s fashion retailer soared by 28 per cent in early trading as rumours flew about the sale of Icelandic investor Baugur’s stake. The share price of Laura Ashley, which owns around 10 per cent of Moss Bros, also rose as traders anticipated a bid from Sir Philip.

This could be the first in a series of purchases of devalued Baugur assets by Sir Philip, who already owns several big UK high street names.

Baugur is the biggest shareholder in Mosaic, the women’s fashion group behind Principles, Oasis and Karen Millen, has a 35 per cent stake in House of Fraser, and owns toy store Hamleys, supermarket chain Iceland, and womenswear shops Jane Norman and Whistles.

Earlier this year, it launched a failed £40 million bid for Moss Bros, which foundered on stake-building by Laura Ashley.

A spokesperson for Baugur said: "The Moss Bros stake was a longer strategic holding and following the premium price offered by Sir Philip Green we have decided to sell our stake."

It also has a 20 per cent share of French Connection and a 7 per cent stake in Debenhams.

Another bidder for Moss Bros would have to win over the retailer's founding Moss and Gee families, many of whom opposed Baugur's offer. They still own 23 per cent of the company.

Baugur's future has been questioned after the collapse of the Icelandic economy and the nationalisation of Glitnir, the country’s third-largest bank. Stodir, an investment vehicle of Baugur founder and main shareholder Jon Asgeir Johannesson, was put into administration last month.

Last month, Sir Philip flew to Reykjavik with an offer to buy the estimated £1.5 billion of Baugur's debt that has been frozen by the Icelandic Government since the crisis.

A deal would give him effective control of the group's portfolio. He said recently that because of the economic crisis in Iceland, talks were still up in the air about buying parts of Baugur's retail empire to add to his own Arcadia portfolio, which includes Dorothy Perkins and Burton as well as TopShop.

If a tie-up between the two groups succeeded, over 6,000 shops around the UK employing around 90,000 people could come under the same umbrella.

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