It’s been a busy week for Icelandic retailer Baugur, following yesterday’s announcement of its interest in bidding for Somerfield while it awaits the green light for its takeover of the Big Food Group tomorrow.

Somerfield, which rejected a takeover approach from a consortium back in 2003, has said it will be investigating Baugur’s approach of a 190p per share offer.

The prospective offer has lead to speculation about what this could mean for the grocery retail market, with Baugur potentially managing a strong high street portfolio that would include Somerfield, Kwik Save and Iceland.

Some analysts believe merging Iceland’s 760 stores with Kwik Save’s 525 stores would be the most likely outcome as these chains are both placed at a similar discount segment of the market.

However, other market research considers that Baugur could drastically save costs by merging Somerfield with Iceland to form a big player in convenience stores, as reported in The Times today.

Baugur currently also owns a list of UK high street chains, including MK One, Julian Graves, Whistles, Goldsmiths, Oasis and Hamleys.