Borders is understood to have received indicative offers from Luke Johnson and WHSmith for its stationery chain Paperchase.

Sources said Risk Capital Partners chief Luke Johnson – who owns Borders UK – has offered about half the£80 million thought to be wanted by Borders US for the chain, which was put up for sale last month (Retail Week, May 16).

WHSmith is understood to have also made an offer and retail entrepreneur Theo Paphitis, who owns the Ryman chain, is believed to be interested, although it is unclear whether he has made a bid.

Private equity businesses previously linked to the sale, including HgCapital, Isis Equity Partners and Change Capital, are understood to be watching with interest.

The deal is complicated by the fact that Paperchase operates 40 per cent of its outlets as concessions in Borders UK stores.

“The business cannot survive without Luke Johnson,” said one source, who added that Johnson’s offer is likely to have been rejected.

Another source said: “The key to the puzzle is what will happen to the Borders concessions.”

Johnson was unavailable for comment. WHSmith and Theo Paphitis declined to comment.