The mystery party hoping to land discount retailer Peacock has put a price tag of around £404 million on the group.

While Peacock yesterday revealed the value of the bid approach for the first time, it pointed out discussions were at an early stage and subject to conditions.

The identity of the party was not disclosed, although speculation last week indicated it involved managers backed by a group of US-based hedge funds.

That would mark a new trend for the London market as analysts had expected finances to be put up by private equity houses.

Hedge funds usually concentrate on high-risk speculation on movements in bonds, derivatives and currencies so any move into buyouts would mark a new development in the UK.

Among those thought to be backing the Peacock bid is Och-Ziff Capital, which lent money to Malcolm Glazer to buy Manchester United.

Peacock - the owner of the Peacocks, bonmarche and Fragrance Shop businesses - revealed last month that it was in takeover talks for the second time in half a year.

The offer price signalled by Peacock yesterday was 340.5p a share, equivalent to £404.2 million but still below the target of Evolution Securities retail analyst Nick Bubb.

Peacock added in its statement: "The board would wish to stress that discussions remain at a preliminary stage and that the proposals being considered are subject to a number of material preconditions and there is no certainty that any offer will be made for the company."

Peacock has proved to be one of the better performing retail stocks after recently revealing a 4.3 per cent rise in like-for-like sales at its 434-strong chain of stores.

While shares have rallied from a low of 64.5p, market rumours have persisted about the chances of a buyout.