House of Fraser, which last year attracted interest from Sports Direct founder Mike Ashley and fellow retailer John Lewis, is believed to have spoken to representatives from a Qatari family in recent months about a possible takeover.
House of Fraser has more than 60 branches in the UK and Ireland and generates almost £1.3bn in sales a year.
The 164-year-old group was taken private by a consortium of investors known as the Highland Group in 2006.
It now counts Icelandic bank Landsbanki – which led the consortium – Scottish tycoon Sir Tom Hunter and executive chairman Don McCarthy among its shareholders.
House of Fraser did not return calls for comment yesterday.
Investors from Qatar already have a strong presence on the British retail scene.
The country’s sovereign wealth fund bought Harrods from Mohamed Al-Fayed in 2010 and also holds a 26 per cent stake in Sainsbury’s.
Talk of Qatari interest in retailer Marks & Spencer earlier this year sent the high street stalwart’s shares up seven per cent, though the potential bidders are yet to break cover and table an offer.