Somerfield could be sold as part of a £2.5bn auction.

Its owners Robert Tchenguiz, Barclays Capital, Apax and Kaupthing Bank have hoisted a 'for sale' sign over the 955-store supermarket chain and investment bank Citigroup has been appointed to lead the auction after the company received a number of unsolicited approaches.

Reports suggest Asda, Morrisons and Sainsbury's are the interested parties, although Marks & Spencer and the Co-operative Group could also enter the fray.

Chairman and shareholder John Lovering has been positioning Somerfield for a sale for some time and had let it be known around the industry that he was open to offers, an unnamed retailer told the Financial Times.

Citigroup was appointed by Somerfield last summer to investigate its strategic options, including a refinancing of the business, but was forced to shelve its plans in August because of volatile global debt markets.