The most recent reports in week-long speculation over a potential bidder for Sainsbury’s place the Asda takeover duo in the frame to lead the bid.

A private equity consortium – made up of Blackstone with big stakes in United Biscuits and Cadbury-Schweppes, US takeover company Kohlberg Kravis Roberts and CVC, which owns the AA and Formula One motor racing – has reportedly approached the businessmen who revived the fortunes of Asda in the 1990s before its takeover by Wal-Mart.

Former Asda chiefs Allan Leighton and Archie Norman are thought to have the expertise to guide any potential bid that could see the UK’s third bigeest supermarket sold for as much as £10 billion, in what would be Europe’s biggest ever buyout.

Sainsbury's has been the subject of bid speculation in the stock market since well before Christmas and is thought to mark the beginning of growing international interest in the lucrative UK supermarket industry, with rivals like Wm Morrison in the frame and enjoying an uplift in shares as a result.

Sainsbury’s has managed to turn around its own fortunes, after suffering from supply chain problems that left shelves empty during Christmas 2004. It also admitted that the mega IT outsourcing deal it signed with Accenture had led to rising IT costs, when it pulled out five years early in October 2005.

Since then it has relaunched its online home shopping site and updated its marketing, ranges and stores to post positive financial results over the 2006 Christmas period.