Baugur has finally decided to withdraw from the constortium planning a £1.1bn bid for Somerfield.
The Icelandic retail group has been under pressure to back out of the consortium since its chief executive Jon Asgeir Johannesson was charged with fraud.
The remaining partners, Apax, Barclays Capital and property developer Robert Tchenguiz, have said that they would continue to work towards a possible offer for Somerfield.
The departure could open the way for a new member of the consortium and Asda’s name has re-emerged as a contender. The supermarket attempted to join the consortium several months ago, but was rebuffed, according to The Guardian.