Iceland chief executive Malcolm Walker has held talks with private equity giant Blackstone about backing his bid for the frozen food retailer.

The firm is believed to have had several conversations with the Iceland founder about his attempt to acquire the 67% of the chain which collapsed Icelandic banks Landsbanki has put up for sale. Walker and Iceland’s management own a 23% stake and the remaining 10% is controlled by the resolution committee of Glitnir

Although Walker has spoken to a number of private equity houses, Blackstone is understood to be on his shortlist according to The Sunday Telegraph.

The newspaper reports that Walker also has a shortlist of six debt providers if he chooses not to resort to private equity backers.

First round bids for the frozen foods chain are expected to be submitted by the middle of this month so Walker could make his decision on how he intends to finance his bid as early as this week.

It is thought the bid will be between £1bn to £1.5bn.

Walker told Retail Week in May that his preferred option would be to use debt finance to fund the deal. The Iceland chief executive is being advised by Rothschild.

First-round bids are expected from grocers Asda and Morrisons, however as part of its shareholder agreement Walker will win the auction as long as he can match the highest bid.