RETAIL giants Morrisons and Sainsbury’s are among those reportedly preparing to take on Deeside-based Iceland Foods if an auction goes ahead.

If the sale of a majority stake in the frozen food retailer triggers an auction for the entire value supermarket chain, the supermarket rivals are ready to step into the fray, according to newspaper reports this week.

Morrisons, Britain’s fourth-biggest grocer by market share, is building a chain of convenience stores and would be expected to examine any sizeable estates that came on to the market, they said.

However, its interest is not thought to have progressed any further at this stage. It would join J Sainsbury in eyeing up Iceland, expected to be valued at between £1.7bn and £2bn.

Sainsbury said last week that it would examine Iceland if it came up for sale.

The Resolution Committee of Landsbanki, the failed Icelandic Bank, is in the process of appointing investment banking advisers to sell its 67% stake in the firm. Asda bought Netto UK last year in a £778m deal, indicating that it is prepared to look at portfolios of smaller stores.

Tesco might also be interested, although it could face competition issues.

The Co-operative Group, which bought Somerfield in 2008, is tipped by some senior retailers as a potential buyer.

The sale of Landsbanki’s stake is complicated by the fact that Malcolm Walker and the management of Iceland Foods own 26%.

Mr Walker is currently climbing Everest to raise money for Alzheimer’s Research UK, and will be away until early June.

Last year, he made a £1bn offer for the shares in Iceland that he did not already own, which remains on the table, and he has the right to match any deal that is agreed.

If the auction goes ahead, it would be one of the last chances for the major supermarket groups to acquire a ready-made chain of food retail properties. As well as the supermarkets, it is also thought that private equity investors may bid for the frozen foods chain.