Sir Alan Sugar today appeared to become the latest victim of frozen assets in Iceland as he failed in his bid to pick up a 3.88% stake in beleaguered High Street chain Woolworths.

Sugar's property company Amsprop announced a week ago that it had built up a 3.88% stake in Woolworths, which would have cost it about £1.8 million. But today it said it did not have a holding that was above the disclosable level of 3%.

Amsprop told the Stock Exchange this was because the "selling party was unable to deliver the shares".

It has never been clear from whom Sugar was buying the stake. But Woolworths' largest shareholder is Icelandic retail investment vehicle Baugur, which has 10%. At the same time, recently nationalised Icelandic bank Kaupthing is believed to have held a direct share in Woolworths, although this was not above the disclosable level of 3%.

City sources say it is possible the shares were held by a different investor but parked in a nominee account at Kaupthing Singer & Friedlander, the Icelandic bank's London corporate finance offshoot. It is believed Sugar had already amassed a small stake in Woolworths, and last week's purchase had taken him over the disclosable level.

Analysts say he may well be interested if the distressed pick 'n' mix chain sells off some of its 800 stores.

Sugar is not the first entrepreneur to think he had bought a bigger stake in a company than he had because of Icelandic bank problems.

Joe Lewis, the Bahamas-based billionaire, last week thought that he had bought a 25% stake in pubs chain Mitchells & Butlers for £136 million from Robert Tchenguiz.

In fact only a 22% stake arrived and the missing 17 million shares, which Lewis had not paid for, were assumed to be frozen in Kaupthing.

Tchenguiz's 10% stake in J Sainsbury also remains something of a mystery. It was sold at a substantial loss through Kaupthing almost a fortnight ago but has yet to turn up in anyone else's hands.