Grocery giant Asda has secured backing from Barclays Capital for a takeover bid of sector rival Iceland, it has been alleged.
According to The Sunday Times, the bank has agreed to support the US-owned supermarket chain in its attempts to see off other suitors of the value retailer.
Asda refused to comment on the speculation this morning.
Of the other major supermarket groups, Morrisons has also been linked to a potential purchase whilst Founder and CEO of Iceland Malcolm Walker is thought to be favourite to take control of the business as he and several other executives at the firm already possesses a 23 per cent stake in it.
Iceland has over 800 stores in its portfolio and many of its small town centre units would suit both Morrisons and Asda’s ambitions to expand their convenience offers.
Convenience is a booming format for grocery at a time when many of the major supermarket have seen sales stagnate due to average family finances being severely squeezed.
Last week the UK’s biggest retailer Tesco announced a £500 million cut in prices in an attempt to boost trading and recover market share lost to discounters such as Aldi or Lidl.
Despite Iceland appearing an appetising morsel for many of the bigger grocers, Walker told Retail Gazette in an interview in July that no-one would be able to run the business better than the existing management team.
Walker said: “We understand the business, we live and breathe the business and we can grow it further. If anyone else was to come in I don’t suppose they would have a clue really.”