The department store company's shares shot up more than 8% on a report that Kohlberg Kravis Roberts is lining up a $24bn ( 17bn) buyout, a deal that would be the biggest ever in the retail industry.

As well as the 10-storey flagship Macy's shop in Manhattan's Herald Square, a shopping Mecca for visitors to New York, the company also owns the upmarket Bloomingdales stores. There are also 850 Macy's-branded department stores across the US, and the company had sales of $10.2bn in the first half of this year.

Macy's shares have been ticking higher since mid-May, with speculators piling in most heavily on a Friday afternoon in the hope of a deal announcement on a Monday morning. Thursday's move was the most pronounced, though, prompted by a report in trade magazine Women's Wear Daily that KKR had teamed up with Goldman Sachs to launch a bid that could be agreed soon.

Goldman Sachs sources were later quoted saying the investment bank's private equity division was not involved, but its retail sector analyst is among many on Wall Street who think a leveraged buyout is likely.

Another analyst, Robert Buchanan at AG Edwards, echoed that view, telling clients:

"Macy's does appear to be a good candidate, given such considerations as its abundant cash generation and its substantial ownership of square footage, 68% of its total, inclusive of situations where space is owned but nearby land is leased."

Private equity bidders are likely to be tempted to generate a quick profit by selling and leasing back Macy's property. A bid would also take advantage of Macy's currently enfeebled share price, which has been hit by poor sales.

The company's 2005 acquisition of May's stores has been plagued by difficulties, as loyal customers of the old May's department stores have deserted after their conversion to the Macy's brand.

Rowland Hussey Macy arrived in New York in 1858 and set up his first "fancy dry goods" store in the city.