Morrisons leads way but warns of tough Christmas

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Morrisons declined to comment on rumours that it has put in a first round bid for Iceland Foods.

Arch rival Leeds-based Asda is reported to have teamed up with Scottish frozen food supermarket chain Farmfoods to make a £1.4bn bid for the frozen food retailer.

Asda and Morrisons are thought to be competing against four private equity firms.

It is understood that if successful, Asda would sell around 200 stores to Farmfoods.

Asda and Morrisons are thought to have tabled bids at the top end of the £1.3bn to £1.5bn price range as both could make sizeable cost savings through synergies.

They would have to sell around 200 of Iceland’s 800 stores to get round the Competition Commission.

Morrisons could team up with Waitrose, Lidl, Sainsbury’s and Tesco to offload parcels of stores.