Iceland has admitted having "tentative" discussions with BHS owner Storehouse about the possibility of buying the chain in the event of a sell-off. A possible deal would come on the back of a recent agreement between Iceland and Storehouse through which Iceland supplies a range of own label food products to 10 BhS stores. The deal, which runs until the end of 2006, will enable Iceland to open a further 90 food sections in BHS stores by the end of next year. Analysts say Iceland could extend its white goods range, take on more non food products, and totally change the direction of its business. But one pointed out taking on 150 BHS stores, with an average size of 30,000 sq ft, would double the company's portfolio overnight. He added that although the management was sound, Iceland should "think carefully" about its strategy before committing to buying the stores. Iceland chief executive Malcolm Walker would not be drawn into further details. A spokeswoman said: "As part of its ongoing conversations with Storehouse about this trading relationship, Iceland confirms it has had tentative discussions concerning the possibility of acquiring BHS. No offer has been made and the discussions are at a preliminary stage." Other interested parties for Storehouse include venture capitalist Philip Green, who recently backed off from making a bid for M&S, and investment vehicle Knutsford. {{NEWS }}