According to the Daily Mail advisers of the resurrected retailer Morgan Stanley have been looking at Safeway’s network of stores to see how many could be converted into the M&S Simply Food format.
Tesco yesterday stepped in from the sidelines to join the takeover bid.
Philip Green is thought to be planning a knockout cash bid for Safeway that could escape a protracted investigation by Britain’s competition authorities.
The owner of BHS is said to be hoping to outflank competing bidders with an offer that could be accepted by shareholders in just three weeks.
Meanwhile, the Financial Times reports that Wal-Mart and Sainsbury are locked in a race to sign up John Bridgeman, former director general of the Office of Fair Trading, to help get their bids for Safeway past the regulator he used to run.
Bridgeman, who now works as a consultant, said he intended to join up with one of the bidders, but had not yet decided which to back.