UK retailer Tesco has remained silent on rumours that it is preparing to enter the fray in the sale of Australia's number two retailer Coles Group.

Reports coming out of Australia have suggested that Tesco has hired Merrill Lynch to advise it on a possible Coles bid. However, when contacted by just-food this morning (4 May), Tesco declined to comment stating: "We do not comment on markets that we are yet to enter."

Were Tesco gearing up to make a move on Coles, it faces some stiff competition. A private equity syndicate led by KKR and Australian conglomerate Wesfarmers have tabled separate bids for the whole group, while Australia's largest retailer Woolworths has signalled its interest in Coles' Target and Officeworks units.