The escalating bidding war for UK supermarket chain Safeway is catching the eye of buyout specialists, with US firm Kohlberg Kravis Roberts preparing to swoop.

KKR is reportedly trying to convince Wal-Mart (owner of Asda, the UK’s third largest supermarketeer) of the benefits of a joint bid. The discount titan is interested in a solo cash offer [WAMN: 14-Jan-03], but a combined effort (under which KKR would probably keep many of Safeway’s stores) might stand a better chance of gaining regulatory approval.

The Competition Commission is thought unlikely to approve a straight takeover of Safeway by another member of the ‘big four’ chains. As a result, number three operator J Sainsbury is said to be considering taking on partners in its offer as well, with original bidder Morrisons, Wal-Mart and KKR all touted as possibilities.

Data sourced from: Times Online (UK); additional content by WARC staff