The private equity firm is financing James Heneage, the managing director, and Philip Dunne, the non-executive chairman, who co-founded the company in 1987, in their efforts to take the retailer private, The Times has learnt.

News of the potential bid by the two directors, who control 15 per cent of Ottakar’s, sent shares in the company surging by 16.2 per cent to an eight-month high of 326½p.

Michael Hitchcock, the finance director, is also part of the management team that yesterday confirmed that it had formed a new company to enter discussions “in relation to a possible offer being made” for the retailer.

Yesterday analysts speculated that the company could be sold for between 325p and 340p a share, valuing it at up to £74 million.

The possibility of a trade player such as Waterstone’s or WH Smith entering the fray, in an attempt to seize the 8 per cent market share held by Ottakar’s, was also raised, although analysts said that it was unlikely, given the structure of the market and conflicting strategies. The approach comes a month after Ottakar’s reported that its underlying sales had slipped over the summer after supermarkets slashed the retail price of the latest Harry Potter novel. The retailer has also been hit by weakness in the specialist book market.

Ottakar’s said yesterday that a committee of its non-executive directors had been formed to handle any offers, to avoid any conflicts of interest. The committee will comprise John Thornton, David Adams and Mark Fane. The retailer said that the talks “may or may not” lead to an offer being made for the company, with a further announcement expected in due course.

Mr Heneage, a former advertising executive, floated Ottakar’s on the stock market in 1998 at 153p, valuing it at £30 million.

The company, which is being advised by Bridgewell, the corporate finance boutique, was dogged by talk of a management buyout a year ago.

In the 14 weeks to May 7, sales at Ottakar’s increased 4.7 per cent on the same period last year, with like-for-like sales down 0.5 per cent.

Analysts have expressed concerned about the long-term outlook for independent booksellers, who are seeing margins squeezed by the big supermarket chains and online sellers such as Amazon.

KBC Peel Hunt, the broker, lowered its full-year profit forecasts from £8.2 million to £7.2 million.

MARKET SHARE

Waterstone’s 17%

WH Smith 16%

Independents 16%

Book clubs 14%

Ottakar’s 8%

Supermarkets 8%

Internet 7%

Borders 7%

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