FRANKFURT (Reuters) - Canadian retailer Hudson's Bay (HBC) (>> Hudson's Bay Co) is interested in acquiring German department store chain Kaufhof (>> METRO AG), two sources familiar with the matter told Reuters on Tuesday.

Talks with German retailer Metro, which owns Kaufhof, were at an early stage, one source said.

HBC and Metro declined to comment.

HBC, which operates Hudson’s Bay in Canada and U.S. luxury chains Saks Fifth Avenue and Lord & Taylor, is interested in acquisitions and has the financial means for a deal.

Metro has long said it would be prepared to sell the department store chain for a fair price as it focuses on developing its cash-and-carry and consumer electronics businesses.

There had been speculation about a possible merger of Kaufhof and German department store chain Karstadt. In February, Metro Chief Executive Olaf Koch said there were several interested parties.

Kaufhof posted adjusted earnings before interest and tax of 193 million euros ($212 million) on sales of 3.1 billion euros in fiscal 2013/14.

(Reporting by Matthias Inverardi and Solarina Ho, Writing by Kirsti Knolle)

Stocks treated in this article : METRO AG, Hudson's Bay Co