United Co-operatives has entered the fray in the ongoing bid battle for Somerfield.
The retailer is reported to have approached Somerfield with “a view to exploring the possibility fo making an offer”.
The deal sees the co-op join the ranks of other suitors which include Icelandic retail group Baugur.
The news pushed Somerfield shares up 4.5p, or 2.28 per cent to 202p.
United Co-operatives, which is independent of the Co-operative Group, runs 500 convenience stores in the north Midlands, north west and Yorkshire.
Peter Marks, chief executive, said: "We are taking a look at Somerfield because we believe a combination of our businesses could make sound commercial operational and financial sense. However we are at an early stage in the process."
In February, Baugur kicked off interest in the supermarket chain by making a £1bn offer which Somerfield.
Meanwhile, two other groups are believed to have made £1bn-plus offers for the firm, with one group led by Iranian property tycoon Robert Tchenguiz and the other from London & Regional Properties.
