LONDON — Debenhams plc on Monday confirmed reports that it is in talks with the U.K.-based venture capital group Permira, but warned those talks could come to nothing.

Debenhamsissued a statement saying talks were progressing toward a possible offer of $6.80 per share in cash, the price mentioned in press reports last week. That would value Debenhams at approximately $2.47 billion. Dollar figures are converted from the pound at current exchange.

However, the company added, “There can be no certainty that an offer will be put forward for shareholders to consider.” Permira, which was tipped to make its formal bid early this week, will not make a move until it gets a recommendation from the Debenhams board.

As reported, Permira approached Debenhams with an indicative bid in mid-May. The fund has been working closely with Belinda Earl, Debenhams chief executive officer, and her team on a management buyout.

It appears many institutional shareholders want Debenhams to hold out for a higher offer. Euan Stirling, investment director at Standard Life, which holds a 4.9 percent stake in the department store, said, “The price that is being mooted does still seem cheap, especially in light of a strong trading statement last week, and the fact that the consumer certainly seems to have returned to the shops over the summer.”

Monday’s statement reiterated that discussions with CVC Capital Partners and Texas Pacific Group, which have joined forces with the aim of making a rival bid, were progressing, but still at an early stage.

Meanwhile, the company also confirmed press reports here that it was giving CVC/TPG money as an incentive and to cover costs of the due diligence process. CVC/TPG is getting approximately $1.6 million per week.

A spokeswoman for Debenhams defended the measure, telling WWD it was in the interest of shareholders for Debenhams to support potential rival offers. A spokesman for CVC/TPG declined to comment.

Permira, too, will receive fees from Debenhams.

Institutional shareholders aren’t fighting that decision. Stirling of Standard Life said: “It’s a positive sign, in a sense, that Debenhams management is obviously focused on obtaining the maximum price for selling the business, and they seem to be resigned to selling.”Steve Gotham, a senior retail analyst at Verdict Research, a consultancy in London, said Debenhams is taking a gamble by giving potential bidders money. “Perhaps they just could have held out for a higher bid, without the subsidies,” he said.

The U.K.-based Debenhams has a total of 115 stores, 90 of which are in the U.K and Ireland.

Founded in 1778, Debenhams employs 22,000 people and last year had revenues of $2.72 billion and net profits of $175 million. In 2001, net revenues were $2.59 billion and net profits were $165 million.

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