The founder of UK retailer Matalan has reportedly pledged to help fund Iceland Foods chief executive Malcolm Walker's bid for the frozen food retailer.

The Liverpool Daily Post reported that John Hargreaves, as well as furniture group DFS founder Lord Kirkham, will support founder Walker and other management's efforts to buy the 76% stake in Iceland Foods currently up for sale by failed Icelandic banks Landsbanki and Glitnir. Iceland Foods declined to comment.

Walker is also in talks with with debt-finance companies and private-equity firms to finance the acquisition.

Morrisons and Asda have been touted by industry watchers as potential bidders for Iceland. Last week, Sainsbury's CEO Justin King admitted the retailer would see what stores would become available if another retailer bought Iceland and was forced to offload stores because of competition concerns.

Walker only has to match the highest bid from a rival in order to secure the shares, thanks to a clause within a shareholder agreement.