Matalan, the value chain, may fail to secure a sale this week as bidders balk at the £1.5bn price tag.
Potential bidders are understood to include private equity houses TPG, BC Partners and Advent International. Investment group Warbus Pincus has also been linked to the deal.
According to The Sunday Telegraph, Advent International, which owns the Poundland value chain, remains interested but said the £1.5bn price tag is too high. The paper also reported that TPG is concerned about overpaying for Matalan and is preparing an offer between £1.2bn and £1.3bn with the backing of RBS and Lloyds.
Warbus Pincus is understood to be undecided as to whether it will bid, having bought lifeboat maker Survitec for £280m only last week.
Reports now suggest that the deadline for the deal could be pushed back a week to allow more time for bidders to put together their offers.