With own branded consumer PCs not scheduled to be released till next year, Lenovo may saunter into the fast growing European retail market earlier than planned by acquiring Packard-Bell.
If the proposed take-over is successful, it will be the second time in ten months that Packard Bell has changed hands, after John Hui bought the company from NEC.
In a statement, Lenovo confirmed it was in discussions with third party companies and government organisations to lay the foundations for the acquisition.
"The company is in discussion with an independent third party in relation to a proposed acquisition of Packard Bell," it stated.
The Chinese giant, which bought IBM's PC division late 2004, entered into a memorandum of understanding with the third party to explore the acquisition but said it may not materialise.
According to US report, John Hui said the buy would "spearhead" Lenovo's push into the European retail market and give it a "jump start".
Lenovo sells consumer PCs in China and has piloted sales in Germany but planned to target UK retailers from April 2008 at the earliest.
In Western Europe last year, Gartner data showed Packard Bell held three per cent market share of all retail PCs sold.
Ranjit Atwal, principal analyst at the research giant said Lenovo needed a foothold in retail, "where the major growth has occurred in the last year".