Supermarket group Asda was yesterday saying nothing about a report claiming it could enter the bidding battle for Somerfield.
Asda was said to be considering launching an outright bid for the Bristol-based chain, which analysts believe could go for up to £1.2 billion.
The country's number two supermarket could alternatively strike a deal with one of the two potential buyers already circling the store.
If it decides on the latter option, Asda would either join one of the existing bid teams or buy a string of stores from the winner following a deal, the Sunday Telegraph said.
Bankers said that Asda would use some of the sites to expand its non-food chain, which currently trades from just two branches.
A spokesman for Asda, owned by US giant Wal-Mart, said the firm would not comment on speculation.