Asda is reportedly considering a bid for Argos and Homebase owner Home Retail Group in an attempt to close the gap on Tesco.

Press reports claimed US parent Wal-Mart is growing frustrated at the lack of growth since acquiring Asda in 1999 and had identified a swoop for HRG as a way to increase its presence on the high street.

“They are poised for a major acquisition,” a source told the Daily Mail. “Wal-Mart has realised it's the only way they can grow and compete with Tesco on the same footing in the UK.”

Home Retail has around 700 stores in the UK and recorded sales of £5.9bn in the last financial year.

A deal could be completed in the first half of this year, the report claimed.

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