Iceland boss Malcolm Walker has offered £1bn to buy back the frozen food supermarket that he founded.

The entrepreneur and its other management already own 24% of the company, while the remaining 76% is owned by Landsbanki and Glitnir, two of the collapsed Icelandic banks.

According to the Sunday Telegraph, the banks have already rejected Walker’s management offer, saying they are not interested in selling to the current management at £1bn.

Another unknown party, apparently an investment fund, is also understood to have made a bid for up to £1.4bn.

Walker founded Iceland in 1970 and built it into a national supermarket chain. However, he was ousted as executive chairman in January 2001 after the company released a profit warning days after he sold £13.5m worth of shares. A SFO investigation cleared him of any wrongdoing, but there was no love lost between Walker and the then chief executive who replaced him, Bill Grimsey, who replaced him in a coup while Walker was on holiday.

In 2005 Iceland was taken private by a consortium headed by Baugur. It paid £326m for Big Food Group, Iceland’s then parent company. Baugur reinstated Walker at the helm.

When Walker returned, the chain was near to collapse. Like-for-likes were down as much as 10%. During the first two years under Walker’s return, they rose by 16%.

Walker is understood to have the banking of a bank, rather than private equity. A sale could be crucial for Landsbanki because it would go a large way towards paying off the “Icesave” debt that divided its home nation and caused a diplomatic row with Britain.