The US investment group Fidelity has backed a last-minute attempt by Safeway's board to force a higher offer for the company from Morrisons.

Anthony Bolton, the British boss of the US giant, is believed to have told Safeway chairman David Webster that it should be sold for more than the £2.9billion all-share offer tabled by Morrisons in January.

Fidelity's support is crucial to Webster and his chief executive Carlos Criado-Perez, as it owns 14 per cent of Safeway's share and four per cent of Morrisons.

Fidelity and other large shareholders are seeking to take the offer up to £3bn.

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