Sports Direct is understood to be preparing a £61.4 million bid to purchase Debenhams.
The sports retailer, owned by Mike Ashley, is already the department store chain's largest shareholder at 30%, but it would take full control is the offer is accepted.
Debenhams has so far been vocal in its resistance to a takeover, stressing that it would not solve the company's immediate debt problems. Instead, it is favouring attempts to raise £200m from existing shareholders.
Sports Direct's offer is conditional on Mike Ashley being appointed chief executive.
The retailer has fired a number of attacks at Debenhams and its board in recent weeks. Earlier in March, it called for all bar one of the Debenhams board to be sacked while offering £150m funding.
The £61m offer is worth 5p per share, more than double Debenhams share price of 2.2p at close of trading on Tuesday.