Rival bidders circle Asda

ASDA could be snapped up by private equity following the collapse of its proposed tie-up with Sainsbury’s.

The supermarket is expected to be sold by its owner, US grocery behemoth Walmart, regardless of whether it manages to secure a merger with Sainsbury’s.

Experts suggested Asda could now fall into the clutches of a private equity owner as Walmart seeks a quick exit from the UK.

In a research note, analysts at Jefferies said: ‘We remain of the opinion that Walmart remains a seller of Asda, and that the business will represent an attractive target for private equity. If we are correct, an alternative offer with no obvious regulatory concerns is likely to emerge quickly.’

But Barclays analysts added: ‘A merger between Sainsbury’s and Asda, or Asda being taken out by private equity, would both be seen as reducing the degree of competition in the UK.’

Online giant Amazon has also been suggested as a potential buyer, as it looks to make its mark in the UK grocery market.

But Walmart could spin Asda off through a stock market listing, others suggested.

Clive Black, analyst at Shore Capital, said: ‘Whatever the outcome, Asda’s present status does not appear permanent.’