It is understood the Icelandic private equity firms have gone into partnership with entrepreneur Kevin Stanford to form a new investment group called Unity, combining their stakes in UK retailers Woolworths and French Connection.
It is also believed they have acquired£900 million in additional funds to be used for further retail investments.
Baugur has a 10 per cent stake in Woolworths and a 14 per cent share in French Connection. The enlarged group is expected to have combined stakes of 13 per cent in Woolworths and 20 per cent in French Connection.
The trio have formed a joint investment vehicle before, combining their shares in Marks & Spencer to form a 2.4 per cent stake in the retailer, bringing this up to 10 per cent with additional investment. They sold the shares last month for a profit of£50 million.
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