Icelandic bank Landsbanki is understood to have held a beauty parade of investment banks vying to run the sale of a stake in frozen food retailer Iceland.

Landsbanki is considering the disposal of the 14 per cent holding in the retailer held by the Icelandic government following the administration of much of Icelandic investor Baugur’s business a fortnight ago.

Landsbanki, itself under government control following its collapse last October, has held discussions about the potential disposal with banks including JP Morgan and NM Rothschild, The Times reported.

A valuation of Icelandic banks’ assets is likely to be completed by next week and no decision will be made before then about the future of Baugur’s assets, which include stakes in retailers such as House of Fraser and Hamleys, as well as Iceland.

A Landsbanki spokesman told The Times there were no immediate plans for a sale of the stake in Iceland. He said: “Our aim remains to maximise the long-term value of shareholdings.”

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