Asda and Sainsbury's are rumoured to be in talks with Safeway to buy some of the troubled store's supermarkets in a late effort to thwart Morrisons proposed takeover, according to a report in The Times.
Asda is believed to be negotiating to buy 50-70 large Safeway stores for up to £1 billion, against the 17 outlets permitted by the Competition Commission.
Sainsbury's is looking to buy a large number of medium-sized stores. The store was given approval to buy 24 Safeway sites in the original commission ruling.
The two stores resumed talks with Safeway after the Department of Trade and Industry said they could now buy more than the 53 stipulated by the commission, as long as they gained prior consent from the Office of Fair Trading.
Analysts said that Safeway, which is awaiting a bid from Morrisons, would be able to use the threat of the store sales as a way of pushing Morrisons to make a formal offer. It has been suggested that Morrisons will walk away from the deal if Safeway sells more than the 53 stores.
However, Sir Peter Davis vehemently denied that any collusion between Asda and Sainsbury's has, or will take place.
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